What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-22 compared with 2022-02-23 · 482 added, 550 removed, 704 unchanged (59% of the section changed)

28 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Petroleum Segment’s Inventory Finished Goods Valuation

As described in Note 2 to the financial statements, the Company utilizes the ability-to-bear methodology to determine the valuation of its Petroleum Segment’s finished goods inventories, which was $198 million at December 31, 2021.

Management makes certain estimates based on observable inputs, including monthly sales prices and current market prices to determine how much raw materials and production costs are capitalized into inventories.

Management then assesses if a lower of cost or net realizable value adjustment is required.

Changes in these estimates could have a significant impact on the Company’s valuation of finished goods inventory.

We identified the Company’s Petroleum Segment’s finished goods inventory valuation process as a critical audit matter.

The principal consideration for our determination that the inventory valuation process is a critical audit matter is the degree of complexity and subjectivity inherent in determining management’s valuation estimates.

December 31, 2021 | 71

Our audit procedures to evaluate the Company’s valuation of finished goods inventory included the following procedures to test management’s process, among others:

• We tested the design and operating effectiveness of management’s processes and controls for determining the valuation of finished goods inventory.

• We obtained a sample of invoices to verify the accuracy of the production costs used in estimates.

• We tested or evaluated the reasonableness of inputs including sales volumes, monthly sales prices, and current market prices for each product by obtaining third-party market prices and a sample of sales transactions by product to verify the accuracy of the information used by management.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

36 unchanged sentences

Cash and cash equivalents (including $ 86 and $ 113 , respectively, of consolidated variable interest entity (“VIE”))

Accounts receivable (including $ 88 and $ 37 , respectively, of VIE)

Accounts receivable, net (including $ 90 and $ 88 , respectively, of VIE)

Inventories (including $ 78 and $ 52 , respectively, of VIE)

6 unchanged sentences

Current liabilities:

Note payable and finance lease obligations (including $ 0 and $ 2 , respectively, of VIE)

Accounts payable (including $ 51 and $ 50 , respectively, of VIE)

7 unchanged sentences

Commitments and contingencies (See Note 11)

CVR stockholders’ equity:

Common stock $ 0.01 par value per share, 350,000,000 shares authorized, 100,629,209 and 100,629,209 shares issued as of December 31, 2021 and 2020, respectively

CVR Energy stockholders’ equity:

Common stock, $ 0.01 par value per share;

350,000,000 shares authorized;

100,629,209 and 100,629,209 shares issued as of December 31, 2022 and 2021, respectively

Additional paid-in-capital 1,508 1,510

Retained deficit ( 956 ) ( 490 )

Accumulated deficit ( 976 ) ( 956 )

Treasury stock, 98,610 shares at cost

18 unchanged sentences

Depreciation and amortization 7 9 10

Loss (gain) on asset disposal 3 7 ( 4 )

Loss on asset disposals 11 3 7

Goodwill impairment — — 41

3 unchanged sentences

Investment income on marketable securities — 81 41

Other income, net 15 7 13

Other (expense) income, net ( 77 ) 15 7

Income (loss) before income tax expense 801 66 ( 415 )

Income tax (benefit) expense ( 8 ) ( 95 ) 129

Income tax expense (benefit) 157 ( 8 ) ( 95 )

Net income (loss) 644 74 ( 320 )

2 unchanged sentences

Basic and diluted earnings (loss) per share $ 4.60 $ 0.25 $ ( 2.54 )

Dividends declared per share $ 4.89 $ 1.20 $ 3.05

Weighted-average common shares outstanding:

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(in millions, except share data) Shares

$ 0.01 Par Value

Deficit Treasury

2 unchanged sentences

Balance at December 31, 2019 100,629,209 $ 1 $ 1,507 $ ( 113 ) $ ( 2 ) $ 1,393 $ 275 $ 1,668

Dividends paid to CVR Energy stockholders — — — ( 306 ) — ( 306 ) — ( 306 )

Distributions from CVR Partners to public unitholders — — — — — — ( 30 ) ( 30 )

Acquisition of CVR Refining non-controlling interest — — ( 2 ) — — ( 2 ) ( 334 ) ( 336 )

Effect of turnaround accounting change — — 35 — — 35 — 35

Net income (loss) — — — 380 — 380 ( 18 ) 362

Balance at December 31, 2019 100,629,209 1 1,507 ( 113 ) ( 2 ) 1,393 275 1,668

Net loss — — — ( 256 ) — ( 256 ) ( 64 ) ( 320 )

Dividends paid to CVR Energy stockholders — — — ( 121 ) — ( 121 ) — ( 121 )

Changes in equity due to CVR Partners’ common unit repurchases — — 3 — — 3 ( 11 ) ( 8 )

Net loss — — — ( 256 ) — ( 256 ) ( 64 ) ( 320 )

Balance at December 31, 2020 100,629,209 1 1,510 ( 490 ) ( 2 ) 1,019 200 1,219

Net income — — — 25 — 25 49 74

Dividends paid to CVR Energy stockholders — — — ( 492 ) — ( 492 ) — ( 492 )

2 unchanged sentences

Other — — — 1 — 1 — 1

Balance at December 31, 2021 100,629,209 1 1,510 ( 956 ) ( 2 ) 553 217 770

Net income — — — 463 — 463 181 644

Dividends paid to CVR Energy stockholders — — — ( 483 ) — ( 483 ) — ( 483 )

Distributions from CVR Partners to public unitholders — — — — — — ( 129 ) ( 129 )

Changes in equity due to CVR Partners’ common unit repurchases — — ( 2 ) — — ( 2 ) ( 9 ) ( 11 )

Balance at December 31, 2022 100,629,209 $ 1 $ 1,508 $ ( 976 ) $ ( 2 ) $ 531 $ 260 $ 791

13 unchanged sentences

Deferred income taxes ( 17 ) ( 98 ) ( 30 )

(Gain) loss on marketable securities ( 81 ) ( 34 ) —

Loss (gain) on asset disposal 3 7 ( 4 )

(Gain) loss on derivatives ( 16 ) 10 14

Gain on marketable securities — ( 81 ) ( 34 )

Loss on asset disposals 11 3 7

Loss on extinguishment of debt 1 8 3

Unrealized loss (gain) on derivatives, net 5 ( 16 ) 10

Share-based compensation 71 46 4

Other non-cash items 12 10 6

Other items 2 4 7

Changes in assets and liabilities:

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Call premium on extinguishment of debt — — ( 5 )

Repurchase of CVR Partners common units ( 1 ) ( 7 ) —

Acquisition of CVR Refining common units — — ( 301 )

Repurchase of common units by CVR Partners ( 12 ) ( 1 ) ( 7 )

Dividends to CVR Energy’s stockholders ( 483 ) ( 241 ) ( 121 )

2 unchanged sentences

Net cash (used in) provided by financing activities ( 696 ) ( 315 ) 355

Net (decrease) increase in cash and cash equivalents and restricted cash ( 157 ) 22 ( 16 )

Cash and cash equivalents and restricted cash, beginning of period 674 652 668

Cash and cash equivalents and restricted cash, end of period $ 517 $ 674 $ 652

Net increase (decrease) in cash, cash equivalents and restricted cash — ( 157 ) 22

Cash, cash equivalents and restricted cash, beginning of period 517 674 652

Cash, cash equivalents and restricted cash, end of period $ 517 $ 517 $ 674

The accompanying notes are an integral part of these consolidated financial statements.

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CVR Energy, Inc.

(“CVR Energy,” “CVR,” “we,” “us,” “our,” or the “Company”) is a diversified holding company primarily engaged in the petroleum refining and nitrogen fertilizer manufacturing industries through its holdings in CVR Refining, LP (the “Petroleum Segment” or “CVR Refining”) and CVR Partners, LP (the “Nitrogen Fertilizer Segment” or “CVR Partners”).

CVR Refining is an independent petroleum refiner and marketer of high value transportation fuels.

CVR Partners produces and markets nitrogen fertilizers in the form of urea ammonium nitrate (“UAN”) and ammonia.

(“CVR Energy,” “CVR,” “we,” “us,” “our,” or the “Company”) is a diversified holding company primarily engaged in the petroleum refining and marketing industry (the “Petroleum Segment”) and the nitrogen fertilizer manufacturing industry through its interest in CVR Partners, LP, a publicly traded limited partnership (the “Nitrogen Fertilizer Segment” or “CVR Partners”).

The Petroleum Segment refines and markets high value transportation fuels primarily in the form of gasoline and diesel fuels.

CVR Partners produces and markets nitrogen fertilizers primarily in the form of urea ammonium nitrate (“UAN”) and ammonia.

We also produce and market renewable diesel.

CVR’s common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “CVI.” Icahn Enterprises L.P.

and its affiliates (“IEP”) owned approximately 71 % of the Company’s outstanding common shares as of December 31, 2021.

and its affiliates (“IEP”) owned approximately 71 % of the Company’s outstanding common stock as of December 31, 2022.

Stock Repurchase Program

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While the Stock Repurchase Program currently has a duration of four years , it does not obligate the Company to acquire any stock and may be terminated by the Board of Directors at any time.

We did no t repurchase any of our common stock during the years ended December 31, 2021, 2020, and 2019.

CVR Refining, LP

On January 17, 2019, the general partner of CVR Refining assigned to the Company its right to purchase all of the issued and outstanding CVR Refining common units not already owned by CVR Refining’s general partner or its affiliates.

On January 29, 2019, the Company purchased all remaining CVR Refining common units not already owned by the Company or its affiliates for a cash purchase price of $ 10.50 per unit (the “Call Price”), or approximately $ 241 million in the aggregate (the “Public Unit Purchase”).

In conjunction with the exercise of its call right for all CVR Refining common units not already owned by the Company or its affiliates, the Company entered into a purchase agreement with American Entertainment Properties Corporation (“AEP”) and IEP, pursuant to which, on January 29, 2019, all of the Common Units held by AEP and IEP were purchased by the Company for a cash price per unit equal to the Call Price, or approximately $ 60 million in the aggregate (the “Affiliate Unit Purchase” together with the Public Unit Purchase, the “CVRR Unit Purchase”).

The total purchase price of $ 301 million was funded with approximately $ 105 million in borrowings under a new credit agreement entered into by the Company on January 29, 2019, with the remaining amount being funded from the Company’s cash on hand.

Amounts drawn under the new credit agreement were fully repaid in February 2019.

The consolidated results of operations and financial position of CVR Refining are reflected as CVR’s Petroleum Segment.

Following this transaction, CVR Refining became a wholly-owned subsidiary of the Company and, therefore, is no longer accounted for as a variable interest entity (“VIE”).

Effective February 8, 2019, CVR Refining’s reporting obligations under the Exchange Act were suspended.

We did not repurchase any of our common stock during the years ended December 31, 2022, 2021, and 2020.

CVR Partners, LP

Interest Holders - As of December 31, 2021, public common unitholders held approximately 64 % of CVR Partners’ outstanding common units, and CVR Services, LLC (“CVR Services”), a wholly-owned subsidiary of CVR Energy, held approximately 36 % of CVR Partners’ outstanding common units.

In addition, CVR Services held 100 % of CVR Partners’ general partner, CVR GP, LLC (“CVR GP”), which held a non-economic general partner interest in CVR Partners as of December 31, 2021.

Following the acquisition of the non-controlling interest in CVR Refining in January 2019, the non-controlling interest reflected on the Consolidated Balance Sheets of CVR is only impacted by the net income of, and distributions from, CVR Partners.

Unit Repurchase Program - On May 6, 2020, CVR Partners announced that the board of directors of its general partner (the “UAN GP Board”), on behalf of CVR Partners, authorized a unit repurchase program (the “Unit Repurchase Program”).

Interest Holders - As of December 31, 2022, public common unitholders held approximately 63 % of CVR Partners’ outstanding common units and CVR Services, LLC (“CVR Services”), a wholly-owned subsidiary of CVR Energy, held the remaining approximately 37 % of CVR Partners’ outstanding common units.

In addition, CVR Services held 100 % of the interest in CVR Partners’ general partner, CVR GP, LLC (“CVR GP”), which held a non-economic general partner interest in CVR Partners as of December 31, 2022.

The non-controlling interest reflected on the Consolidated Balance Sheets of CVR is only impacted by the net income of, and distributions from, CVR Partners.

Unit Repurchase Program - On May 6, 2020, the board of directors of CVR Partners’ general partner (the “UAN GP Board”), on behalf of CVR Partners, authorized a unit repurchase program (the “Unit Repurchase Program”), which was increased on February 22, 2021.

The Unit Repurchase Program, as increased, authorized CVR Partners to repurchase up to $ 20 million of the CVR Partners’ common units.

During the years ended December 31, 2022 and December 31, 2021, CVR Partners repurchased 111,695 and 24,378 common units, respectively, on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $ 12 million and $ 1 million, respectively, exclusive of transaction costs, or an average price of $ 110.98 and $ 21.69 per common unit, respectively.

During the year ended December 31, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of CVR Partners’ common units that was effective as of November 23, 2020, CVR Partners repurchased 623,177 common units, respectively, at a cost of $ 7 million, exclusive of transaction costs, or an average price of $ 11.34 per common unit.

As of December 31, 2022, CVR Partners, considering all repurchases made since inception of the Unit Repurchase Program, had a no minal authorized amount remaining under the Unit Repurchase Program.

This Unit Repurchase Program does not obligate CVR Partners to acquire any common units and may be cancelled or terminated by the UAN GP Board at any time.

As a result of these repurchases, and the resulting change in CVR Energy’s ownership of CVR Partners while maintaining control, CVR Energy recognized a decrease of $ 2 million to additional paid-in capital from the reduction of non-controlling interests totaling $ 3 million and related reduction of a deferred tax liability totaling $ 1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2022.

CVR Energy recognized a no minal increase to additional paid-in capital from the non-cash reduction of non-controlling interests totaling $ 0.1 million and the recognition of a deferred tax liability totaling $ 0.1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2021.

December 31, 2022 | 84

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Unit Repurchase Program enabled CVR Partners to repurchase up to $ 10 million of its common units.

On February 22, 2021, the UAN GP Board authorized an additional $ 10 million for the Unit Repurchase Program.

During the year ended December 31, 2021, CVR Partners repurchased 24,378 common units on the open market in accordance with a repurchase agreement under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended, at a cost of $ 1 million, inclusive of transaction costs, or an average price of $ 21.70 per common unit.

During the year ended December 31, 2020, as adjusted to reflect the impact of the 1-for-10 reverse unit split of CVR Partners’s common units that was effective as of November 23, 2020, CVR Partners repurchased 623,177 common units, respectively, at a cost of $ 7 million, inclusive of transaction costs, or an average price of $ 11.35 per common unit.

As of December 31, 2021, CVR Partners had $ 12 million in authority remaining under the Unit Repurchase Program.

This Unit Repurchase Program does not obligate CVR Partners to acquire any common units and may be cancelled or terminated by the UAN GP Board at any time.

As a result of these repurchases, and the resulting change in CVR Energy’s ownership of CVR Partners while maintaining control, CVR Energy recognized a no minal increase to additional paid-in capital from the reduction of non-controlling interests totaling $ 0.1 million and the recognition of a deferred tax liability totaling $ 0.1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2021.

CVR Energy recognized an increase of $ 3 million to additional paid-in capital from the non-cash reduction of non-controlling interests totaling $ 4 million and the recognition of a deferred tax liability totaling $ 1 million from changes in its book versus tax basis in CVR Partners as of December 31, 2020.

Subsequent Events

The Company evaluated subsequent events, if any, that would require an adjustment to the Company’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of the consolidated financial statements.

Where applicable, the notes to these consolidated financial statements have been updated to discuss all significant subsequent events which have occurred.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(2) Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements, prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), include the accounts of the Company and its majority-owned direct and indirect subsidiaries.

The accompanying consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), include the accounts of the Company and its majority-owned direct and indirect subsidiaries.

All intercompany accounts and transactions have been eliminated.

The ownership interests of noncontrolling investors in the Company’s subsidiaries are recorded as noncontrolling interests.

The ownership interests of noncontrolling investors in CVR Partners are recorded as noncontrolling interests.

CVR Energy has no t recognized any other comprehensive income for the periods ended December 31, 2022, 2021, and 2020.

CVR Partners is considered a VIE.

As the 100% owner of the general partner of CVR Partners, the Company has the sole ability to direct the activities that most significantly impact the economic performance of CVR Partners and is considered to be the primary beneficiary.

In January 2019, following the CVRR Unit Purchase, CVR Refining was no longer considered a VIE and is accounted for as a wholly-owned subsidiary.

Investments in entities over which the Company has significant influence, but not control, are accounted for using the equity method of accounting.

Income from equity method investments represents CVR Energy’s proportionate share of net income generated by the equity method investees and is recorded in Other income, net on the Company’s Consolidated Statements of Operations.

CVR Partners was determined to be a variable interest entity (“VIE”) and is consolidated by the Company.

As the 100 % owner of the general partner of CVR Partners, the Company has the sole ability to direct the activities that most significantly impact the economic performance of CVR Partners and is considered the primary beneficiary.

Investments in entities over which the Company has significant influence, but does not control, are accounted for using the equity method of accounting.

Income from equity method investments represents CVR Energy’s proportionate share of net income generated by the equity method investees and is recorded in Other (expense) income, net on the Company’s Consolidated Statements of Operations.

Reclassifications

Certain reclassifications have been made within the consolidated financial statements for prior periods to conform with current presentation.

Certain immaterial reclassifications have been made within the consolidated financial statements for prior periods to conform with current presentation.

Use of Estimates

The consolidated financial statements are prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are reviewed on an

December 31, 2021 | 79

CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ongoing basis, based on currently available information.

The consolidated financial statements are prepared in conformity with GAAP, which requires management to make certain estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are reviewed on an ongoing basis, based on currently available information.

Changes in facts and circumstances may result in revised estimates, and actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and on deposit, investments in highly liquid money market accounts, and debt instruments with original maturities of three months or less.

Cash and cash equivalents include cash on hand and on deposit and investments in highly liquid money market accounts with original maturities of three months or less.

Restricted Cash

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Accounts Receivable, net

Accounts receivable, net primarily consist of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest.

Also included within accounts receivable of the Nitrogen Fertilizer Segment are unbilled fixed price contracts which is discussed further within Note 7 (“Revenue”).

Allowances for doubtful accounts are generally recorded when it becomes probable the receivable will not be collected and is booked to bad debt expense.

The largest concentration of credit for any one customer was approximately 8 % and 11 % of the net accounts receivable balance at December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021, 2020 and 2019, the Company had no minal bad debt expense.

Inventories consist primarily of domestic and foreign crude oil, blending stock and components, work-in-progress, fertilizer products, and refined fuels and by-products.

All inventories are valued at the lower of GAAP First-In, First-Out (“FIFO”) cost, or net realizable value.

The Petroleum Segment’s unfinished and finished products inventory values were determined using the ability-to-bear methodology.

Other inventories in the Petroleum and Nitrogen Fertilizer Segments, including other raw materials, spare parts, and supplies, are valued at the lower of moving-average cost, which approximates FIFO, or net realizable value.

Accounts receivable, net primarily consists of customer accounts receivable recorded at the invoiced amounts and generally do not bear interest.

Also included within Accounts receivable, net for the Nitrogen Fertilizer Segment are uncollected fixed price contracts which is discussed further within Note 7 (“Revenue”).

Allowances for doubtful accounts are based on historical loss experience, expected credit losses from current economic conditions, and management’s expectations of future economic conditions.

The allowance is recorded when the receivable is deemed uncollectible and is booked to bad debt expense.

The largest concentration of credit for any one customer was approximately 11 % and 8 % of the Accounts receivable, net balance at December 31, 2022 and 2021, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company had no minal bad debt expenses.

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CVR ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventories consist primarily of domestic and foreign crude oil, blending stock and components, work-in-progress, fertilizer products, refined fuels and by-products, and renewable diesel, all of which are valued at the lower of GAAP First-In, First-Out (“FIFO”) cost or net realizable value.

Certain inventories in the Petroleum and Nitrogen Fertilizer Segments, including other raw materials, spare parts, and supplies, are valued at the weighted moving-average cost, which approximates FIFO.

The cost of inventories includes inbound freight costs.

The carrying amounts of the Petroleum Segment’s inventories exceeded their net realizable value (market value) by $ 58 million resulting in the recognition of a lower of cost or net realizable value adjustment as of March 31, 2020.

The $ 58 million loss represents the difference between the carrying value of the Petroleum Segment’s inventories accounted for using the FIFO method and selling prices for refined products subsequent to March 31, 2020.

No adjustment was necessary as of December 31, 2021 or December 31, 2020.

Inventories consisted of the following:

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In-process inventories 35 20

Parts and supplies 72 66

Parts, supplies and other 86 72

Total inventories $ 624 $ 484

At December 31, 2022 and 2021, inventories related to the Nitrogen Fertilizer Segment included depreciation of approximately $ 4 million and $ 3 million, respectively.

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CVR Energy, Inc.

and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Property, Plant and Equipment, net

19 unchanged sentences

Construction in progress 143 142

Accumulated depreciation ( 2,194 ) ( 2,009 )

Accumulated depreciation and amortization

( 2,379 ) ( 2,194 )

Total property, plant and equipment, net $ 2,247 $ 2,273

Leasehold improvements and assets held under finance leases are depreciated or amortized on the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset.

Expenditures for routine maintenance and repair costs are expensed when incurred.

Such expenses are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Company’s Consolidated Statements of Operations.

On May 21, 2019, a subsidiary of CVR Energy sold its crude oil storage terminal located in Cushing, Oklahoma and related assets (the “Terminal”).

As part of this transaction, the Company received cash consideration of $ 43 million for the Terminal and related crude oil inventories resulting in a recognition of a gain on sale of $ 10 million.

The carrying value of the inventory sold as part of this transaction has been presented on a net basis, with the proceeds on sale, within the net cash used in investing section of the Consolidated Statements of Cash Flows.

As of December 31, 2021, the Company had not identified the existence of an impairment indicator for its long-lived asset groups as outlined under Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment .

At inception, the Company determines whether an arrangement is a lease and the appropriate lease classification.

Operating leases are included as operating lease ROU assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets.

Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Note payable and finance lease obligations and Long-term debt and finance lease obligations, net of current portion on our Consolidated Balance Sheets.

Leases with an

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leasehold improvements and assets held under finance leases are depreciated or amortized utilizing the straight-line method over the shorter of the contractual lease term or the estimated useful life of the asset.

Expenditures for routine maintenance and repair costs are expensed when incurred and are reported in Direct operating expenses (exclusive of depreciation and amortization) in the Company’s Consolidated Statements of Operations.

For the years ended December 31, 2022, 2021, and 2020, depreciation and amortization expenses were $ 221 million, $ 206 million, and $ 210 million, respectively.

During the year ended December 31, 2022, the Company had not identified the existence of an impairment indicator for our long-lived asset groups as outlined under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment .

Equity Method Investments

The Company accounts for investments in which it has a noncontrolling interest, yet has significant influence over the entity, using the equity method of accounting, whereby the Company records its pro-rata share of earnings, contributions to, and distributions from joint ventures as adjustments to the investment balance.

At inception, the Company determines whether an arrangement is a lease and the appropriate lease classification.

Operating leases are included as operating lease right-of-use (“ROU”) assets within Other long-term assets and lease liabilities within Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets.

Finance leases are included as ROU finance leases within Property, plant, and equipment, net, and finance lease liabilities within Other current liabilities and Long-term debt and finance lease obligations, net of current portion on our Consolidated Balance Sheets.

Leases with an initial expected term of 12 months or less are considered short-term and are not recorded on our Consolidated Balance Sheets.

The Company recognizes lease expense for these leases on a straight-line basis over the expected lease term.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term using an incremental borrowing rate with a maturity similar to the lease term, as our leases do not generally provide an implicit rate.

ROU assets and liabilities are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term using an incremental borrowing rate with a maturity similar to the lease term, as our leases do not generally provide an implicit rate.

The lease term is modified to reflect options to extend or terminate the lease when it is reasonably certain we will exercise such option.

1 unchanged sentence

The periodic lease payments are treated as payments of the lease obligation and interest is recorded as interest expense.

A lease modification is assessed to conclude whether it is a separate new contract or a modified contract.

If it is a modified contract, the Company reconsiders the lease classification and remeasures the lease.

Deferred Financing Costs

Lender and other third-party costs associated with debt issuances are deferred and amortized to interest expense and other financing costs using the effective-interest method over the life of the debt.

Deferred financing costs related to line-of-credit arrangements are amortized using the straight-line method through the maturity date of the facility.

1 unchanged sentence

Impairment of Long-Lived Assets and Goodwill

Long-lived assets (excluding goodwill, intangible assets with indefinite lives, and deferred tax assets) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future net cash flows expected to be generated by the asset.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future net cash flows expected to be generated by the asset.

If the carrying amount of an asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds their fair value.

Assets to be disposed of are reported at the lower of their carrying value or fair value less cost to sell.

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CVR ENERGY, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill represents the excess of the cost of an acquired entity over the fair value of the assets acquired less liabilities assumed.

3 unchanged sentences

The Company uses November 1 of each year as its annual valuation date for its goodwill impairment test.

One of the reporting units associated with our Nitrogen Fertilizer Segment’s Coffeyville, Kansas facility (the “Coffeyville Fertilizer Facility”) had a goodwill balance of $ 41 million at December 31, 2019.

During the second quarter of 2020, following the completion of the spring planting season, the market pricing for ammonia and UAN, the Nitrogen Fertilizer Segment’s two primary products, experienced significant pricing declines driven by updated market expectations around supply and demand fundamentals which were expected to continue into the second half of 2020.

Additionally, significant uncertainty remained as to the nature and extent of impacts to be seen on the overall demand for corn and soybean given reduced ethanol production and broader economic conditions which may negatively impact demand.

Therefore in connection with the preparation of the financial statements for the three months ended June 30, 2020, given the pricing declines experienced in the second quarter of 2020, further muting of our near-term economic recovery assumptions, and market price performance of CVR Partners’ common units, the Company concluded an impairment indicator was present and a triggering event under ASC Topic 350, Intangibles-Goodwill and Other , had occurred as of June 30, 2020.

Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, but are not limited to, prospective financial information, growth rates, discount rates, inflationary factors, and cost of capital.

Based on the interim quantitative analysis, it was determined that the estimated fair value of the Coffeyville Fertilizer Facility reporting unit did not exceed its carrying value.

As a result, the Company recorded a full, non-cash impairment charge of $ 41 million during the year ended December 31, 2020.

The Company tests goodwill for impairment annually on November 1 of each year, or more frequently if events or changes in circumstances indicate the asset might be impaired.

One of our reporting units associated with our Nitrogen Fertilizer Segment’s Coffeyville, Kansas facility (the “Coffeyville Fertilizer Facility”) had a goodwill balance of $ 41 million at December 31, 2019, which was fully impaired during the second quarter of 2020 when it was determined the estimated fair value of the Coffeyville Fertilizer Facility reporting unit did not exceed its carrying value.

As there was no goodwill balance at December 31, 2022, 2021, or 2020, no annual impairment review was performed.

The Company performed its annual impairment review of goodwill for 2019 associated with the Coffeyville Fertilizer Facility

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reporting unit and concluded there were no impairments.

For the period ended December 31, 2019, no events or circumstances were identified which would trigger the performance of a quantitative analysis after reviewing all qualitative factors impacting the reporting unit including improved market conditions, financial results, and financial forecasts from those used in the fair value analysis for December 31, 2018, which resulted in the fair value of the Coffeyville Fertilizer Facility reporting unit exceeding its carrying value by approximately 36 %.

Asset Retirement Obligations

The Company records an asset retirement obligation (“ARO”) at fair value for the estimated cost to retire a tangible long-lived asset at the time the liability is incurred, which is generally when the asset is purchased, constructed, or leased.

The liability is recorded when there is a legal or contractual obligation to incur costs to retire the asset and only when a reasonable estimate of the fair value can be made.

Certain of the Company’s assets can be used for extended or indeterminate periods of time with proper maintenance and upgrades, which the Company intends, and has a historical practice of, to maintain and upgrade as technological advances are made available.

As a result, the Company believes these assets have indeterminate lives for purposes of estimating AROs.

A liability will be recognized at such time when sufficient information exists to estimate a date or range of potential settlement dates needed to employ a present value technique to estimate fair value.

Loss Contingencies

In the ordinary course of business, the Company may become party to lawsuits, administrative proceedings, and governmental investigations, including environmental, regulatory, and other matters.

The outcome of these matters cannot always be predicted accurately, but the Company accrues liabilities for these matters if the Company has determined that it is probable a loss has been incurred and the loss can be reasonably estimated.

The outcome of these matters cannot always be predicted accurately, but the Company accrues liabilities for these matters if the Company has determined that it is probable a loss will be incurred and the loss can be reasonably estimated.

While it is not possible to predict the outcome of such proceedings, if one or more of them were decided against us, the Company believes there would be no material impact on its consolidated financial statements.

Accrued amounts are reflected in Other current liabilities or Other long-term liabilities depending on when the Company expects to expend such amounts.

Refer to Note 11 (“Commitments and Contingencies”) for further discussion.

Environmental, Health & Safety (“EHS”) Matters

Environmental, Health & Safety (“EH&S”) Matters

The Petroleum Segment and Nitrogen Fertilizer Segment are subject to various federal, state, and local environmental, health, and safety rules and regulations.

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Revenue Recognition

The Company recognizes revenue based on consideration specified in contracts or agreements with customers when performance obligations are satisfied by transferring control over products or services to a customer.

The Company’s revenue recognition patterns are described below by reportable segment.

• Petroleum Segment - The vast majority of Petroleum Segment contracts contain pricing that is based on the market price for the product at the time of delivery.

Obligations to deliver product volumes are typically satisfied and revenue is recognized when control of the product transfers to customers.

Concurrent with the transfer of control, the right to payment for the delivered product is received, the customer accepts the product, and the customer has significant risks and rewards of ownership of the product.

Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

Any pass-through finished goods delivery costs reimbursed by customers are reported in Net sales, while an offsetting expense is included in Cost of materials and other.

Non-monetary product exchanges and certain buy/sell transactions which are entered into in the normal course of business are included on a net cost basis in Cost of materials and other on the Consolidated Statements of Operations.

• Nitrogen Fertilizer Segment - Revenue is recognized based on consideration specified in contracts or agreements with customers when performance obligations are satisfied by transferring control over products or services to a customer.

The adoption of ASC Topic 606, Revenue from Contracts with Customers , resulted in the recognition of deferred revenue and related receivables, on a gross basis, associated with contracts that guarantee a price and supply of nitrogen fertilizer products in quantities expected to be delivered in the normal course of business.

Other considerations - For both segments, excise and other taxes collected from customers and remitted to governmental authorities are excluded from reported revenues.

The Company’s revenue is generated from contracts with customers and is recognized at a point in time when performance obligations are satisfied by transferring control of the products or services to a customer.

The transfer of control occurs upon

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shipment or delivery of the product, as the customer accepts the product, has title and significant risks and rewards of ownership of the product, physical possession of the product has been transferred, and we have the right to payment.

The transaction prices of the Company’s contracts are either fixed or based on market indices, and any uncertainty related to the variable consideration when determining the transaction price is resolved on the pricing date or the date when the product is delivered.

The payment terms depend on the product and type of contract, but generally require customers to pay within 30 days or less, and do not contain significant financing components.

Any pass-through finished goods delivery costs reimbursed by customers are reported in Net sales, while an offsetting expense is included in Cost of materials and other.

Qualifying excise and other taxes collected from customers and remitted to governmental authorities are recorded as a reduction of the transaction price.

Certain sales contracts of the Nitrogen Fertilizer Segment require customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer.

Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer.

An associated receivable is recorded for uncollected prepaid contract amounts.

Cost Classifications

Cost of materials and other includes cost of crude oil, other feedstocks, blendstocks, purchased refined products, purchased ammonia, purchased hydrogen, pet coke expenses, Renewable Identification Number (“RIN”) expenses, derivative gains or losses, and freight and distribution costs.

Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, including applicable share-based compensation expense, property taxes, plant-related maintenance services, including turnaround, and environmental and safety compliance costs, as well as catalyst and chemical costs.

Cost of materials and other consists primarily of crude oil costs, feedstock blendstocks, purchased refined products, purchased ammonia, purchased hydrogen, pet coke expenses, Renewable Identification Number (“RIN”) expenses, derivative gains or losses, and freight and distribution expenses.

Direct operating expenses (exclusive of depreciation and amortization) consist primarily of energy and other utility costs, direct costs of labor, including applicable share-based compensation expense, property taxes, plant-related maintenance services, including turnaround expenses for the Nitrogen Fertilizer Segment, and environmental and safety compliance costs, as well as catalyst and chemical costs.

Selling, general and administrative expenses (exclusive of depreciation and amortization) consist primarily of labor and other direct expenses associated with the Company’s corporate activities, including accounting, finance, information technology, human resources, legal, and other related administrative functions.

For the Company’s Nitrogen Fertilizer Segment, each of these financial statement line items are also impacted by changes in inventory balances.

Derivatives and Fair Value of Financial Instruments

The Petroleum Segment uses futures contracts, swaps, and forward contracts primarily to reduce exposure to changes in crude oil and finished goods product prices to provide economic hedges of inventory positions.

These derivative instruments do not qualify as hedges for hedge accounting purposes under ASC Topic 815, Derivatives and Hedging , and accordingly are recorded at fair value at the end of each reporting period based on quoted market prices.

For the Company’s Nitrogen Fertilizer Segment, Cost of materials and other and Direct operating expenses (exclusive of depreciation and amortization) are also impacted by changes in inventory balances, as these financial statement line items include inventory production costs.

Our segments are subject to fluctuations of commodity prices caused by supply and economic conditions, weather, interest rates, and other factors.

To manage the impact of price fluctuations of crude oil and other commodities in our results of operations and certain inventories, and to fix margins on future sales and purchases, the Petroleum Segment uses various commodity derivative instruments, such as futures and swaps.

The Company has not designated any of its derivative contracts as hedge accounting and records changes in fair value and cash settlements in the Consolidated Statements of Operations.

On a regular basis, the Company enters into commodity contracts with counterparties for the purchases or sale of crude oil, blendstocks, various finished products, and RINs.

These contracts usually qualify for the normal purchase normal sale exception and follow the accrual method of accounting.

The Petroleum Segment may enter into forward purchase or sale contracts associated with RINs.

All other derivative instruments are recorded at fair value using mark-to-market accounting on a periodic basis utilizing third-party pricing.

The Nitrogen Fertilizer Segment may enter into forward contracts with fixed delivery prices to purchase portions of its natural gas requirements.

These natural gas contracts are not treated as derivatives under normal purchase and normal sale exclusions.

These natural gas contracts are not treated as derivatives as they qualify for the normal purchase and normal sale exclusions.

Accordingly, the fair value of these contracts are not recorded at the end of each reporting period.

Refer to Note 8 (“Derivative Financial Instruments, Investments and Fair Value Measurements”) for further discussion of the Company’s derivative activity.

Other financial instruments consisting of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable are carried at cost, which approximates fair value, as a result of the short-term nature of the instruments.

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Fair Value of Financial Instruments

In accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), the Company utilizes the market approach to measure fair value for its financial assets and liabilities.

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities, or a group of assets or liabilities, such as a business.

Topic 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The following is a brief description of those three levels:

• Level 1 — Quoted prices in active markets for identical assets or liabilities

• Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities)

• Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining the fair value)

Financial instruments consisting of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable are carried at cost, which approximates fair value as a result of the short-term nature of the instruments.

The Company’s investments, derivative instruments, RFS obligations and long-term debt, which use fair value measurements and are valued using broker quoted market prices of similar instruments, are considered Level 2 inputs.

Refer to Note 8 (“Derivative Financial Instruments, Investments and Fair Value Measurements”) for further fair value disclosures.

Turnaround Expenses

Turnarounds represent major maintenance activities that require the shutdown of significant parts of a plant to perform necessary inspection, cleaning, repairs, and replacements of assets.

Turnarounds represent major maintenance activities that require the shutdown of significant parts of a plant to perform necessary inspections, cleanings, repairs, and replacements of assets.

Costs incurred for routine repairs and maintenance or unplanned outages at our facilities are expensed as incurred.

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Further details of each segment’s turnaround expensing method are discussed below.

Petroleum Segment - The Petroleum Segment follows the deferral method of accounting for turnaround activities.

Petroleum Segment - Consistent with others in the refining industry, the Petroleum Segment follows the deferral method of accounting for turnaround activities.

Under the deferral method, the costs of turnarounds are deferred and amortized on a straight-line basis over a four-year period of time, which represents the estimated time until the next turnaround occurs.

The deferral method of accounting for turnarounds is considered preferable as it is more consistent with the accounting policy of our peer companies and better reflects the economic substance of the benefits earned from turnaround expenditures.

Turnaround costs and related accumulated amortization are included in the Consolidated Balance Sheets as Other long-term assets.

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Nitrogen Fertilizer Segment - The Nitrogen Fertilizer Segment follows the direct-expense method of accounting for turnaround activities.

Costs associated with these turnaround activities were included in Direct operating expenses (exclusive of depreciation and amortization) in the Consolidated Statements of Operations.

Costs associated with these turnaround activities are included in Direct operating expenses (exclusive of depreciation and amortization) in the Consolidated Statements of Operations.

During the years ended December 31, 2022, 2021, and 2020, the Nitrogen Fertilizer Segment incurred turnaround expenses of $ 33 million, $ 3 million, and $ 1 million, respectively.

Share-Based Compensation

The Company accounts for share-based compensation in accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”).

Currently, all of the Company’s share-based compensation awards, including those issued by CVR Refining and CVR Partners, are liability-classified and are measured at fair value at the end of each reporting period based on

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the applicable closing unit price.

The Company accounts for share-based compensation in accordance with FASB ASC Topic 718, Compensation — Stock Compensation .

Currently, all of the Company’s share-based compensation awards, including those issued by CVR Partners, are liability-classified and are measured at fair value at the end of each reporting period based on the applicable closing share or unit price.

Compensation expense will fluctuate based on changes in the applicable share or unit prices and expense reversals resulting from employee terminations prior to award vesting.

Additionally, the Company has issued certain performance unit awards.

The fair value of these performance unit awards is recognized as compensation expense only if the attainment of the performance conditions is considered probable.

Additionally, the Company has issued certain performance unit awards whose fair value is recognized as compensation expense only if the attainment of the performance conditions is considered probable.

Uncertainties involved in this estimate include continued employment requirements and whether or not the performance conditions will be attained.

The performance objectives are set in accordance with approved levels of the business plan for the fiscal year during the performance cycle and, therefore, are considered reasonably possible of being achieved.

If this assumption proves not to be true and the awards do not vest, compensation expense recognized during the performance cycle will be reversed.

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this assumption proves not to be true and the awards do not vest, compensation expense recognized during the performance cycle will be reversed.

See Note 9 (“Share-Based Compensation”) for further discussion.

Income taxes are accounted for utilizing the asset and liability approach.

Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

Under this method, deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between the amounts recorded in the accounting books and their respective tax basis.

Deferred amounts are measured using enacted tax rates expected to apply to taxable income in the year those temporary differences are expected to be recovered or settled.

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Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in Income tax (benefit) expense.

Further, the Company recognizes interest expense (income) and penalties on uncertain tax positions and income tax deficiencies (refunds) in Income tax expense (benefit).

Earnings Per Share

There were no dilutive awards outstanding during the years ended December 31, 2022, 2021, and 2020.

Recent Accounting Pronouncements - Adoption of Income Tax Standard

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2019-12, Income Taxes (Topic 740).

The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and modifies other areas of the topic to clarify the application of GAAP.

Certain amendments within the standard are required to be applied on a retrospective basis and others on a prospective basis.

Effective January 1, 2021, we adopted this ASU with no material impact on the Company’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - Adoption of Codification Improvements Standard

In October 2020, the FASB issued ASU 2020-10, Codification Improvements.

The ASU amends various sections of the codification in the FASB’s ongoing efforts to simplify and improve guidance.

Effective January 1, 2021, we adopted this ASU with no material impact on the Company’s consolidated financial position or results of operations.

Recent Accounting Pronouncements - New Accounting Standards Issued But Not Yet Implemented

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

This ASU was issued because, by the end of 2022, banks will no longer be required to report information that is used to determine London Interbank Offered Rate (“LIBOR”), which is used globally by all types of entities.

As a result, LIBOR could be discontinued, as well as other interest rates used globally.

ASU 2020-04 provides companies with optional expedients for contract modifications under Topics 310, 470, 842, and 815-15, excluded components of certain hedging relationships, fair value hedges, and cash flow hedges, as well as certain exceptions, which are intended to help ease the potential accounting burden associated with transitioning away from these reference rates.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies certain optional expedients and exceptions for contract modifications and hedge accounting.

Companies can apply the ASU immediately.

However, the guidance will only be available for a limited time (generally through December 31, 2022).

The Company is currently evaluating the impact of adopting this new accounting standard, but does not expect it to have a material impact on its consolidated financial statements and related disclosures.

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Recent Accounting Pronouncements - Accounting Standards Issued But Not Yet Implemented

In March 2020, FASB issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

This guidance applies to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates.

The guidance is effective beginning on March 12, 2020 through the sunset date of Topic 848, which is currently expected to occur on December 31, 2024.

The Company has not utilized any of the optional expedients or exceptions available under this guidance and will continue to assess whether this guidance is applicable throughout the effective period.

(3) Equity Method Investments

For each of the following investments, CVR Refining has the ability to exercise influence through its participation in the management committees, which make all significant decisions.

However, since CVR Refining has equal or proportionate influence over each committee as a joint partner without regard to its economic interest and does not serve as the day-to-day operator, we have determined that these entities should not be consolidated and have applied the equity method of accounting.

• Enable South Central Pipeline, LLC (“Enable JV”) - CVR Refining owns a 40 % interest in Enable JV, which operates a 12-inch 26 -mile crude oil pipeline with a capacity of approximately 115,000 barrels per day that is connected to the Wynnewood Refinery.

For each of the following investments, we have the ability to exercise influence through our participation in the boards of directors, which make all significant decisions.

However, since we have equal or proportionate influence over each board of directors as a joint partner without regard to its economic interest and do not serve as the day-to-day operator, we have determined that these entities should not be consolidated and have applied the equity method of accounting.

• Enable South Central Pipeline, LLC (“Enable JV”) - Through our subsidiaries, we own a 40 % interest in Enable JV, which operates a 12 -inch 26 -mile crude oil pipeline with a capacity of approximately 20,000 barrels per day that is connected to the Wynnewood Refinery.

The remaining interest in Enable JV is owned by Enable Midstream Partners, LP, which was merged with Energy Transfer LP in December 2021.

• Midway Pipeline, LLC (“Midway JV”) - CVR Refining owns a 50 % interest in Midway JV, which operates a 16-inch 99 -mile crude oil pipeline with a capacity of approximately 150,000 barrels per day which connects the Coffeyville Refinery to the Cushing Oklahoma oil hub.

• Midway Pipeline, LLC (“Midway JV”) - Through our subsidiaries, we own a 50 % interest in Midway JV, which operates a 16 -inch 99 -mile crude oil pipeline with a capacity of approximately 131,000 barrels per day which connects the Coffeyville Refinery to the Cushing, Oklahoma oil hub.

The remaining interest in Midway JV is owned by Plains Pipeline, L.P.

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(in millions) Enable JV Midway JV Total

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We lease certain pipelines, storage tanks, railcars, office space, land, and equipment across our refining, fertilizer, and corporate operations.

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years or more.

The exercise of lease renewal options is at our sole discretion.

Most of our leases include one or more renewal options to extend the lease term, which can be exercised at our sole discretion.

Certain leases also include options to purchase the leased property.

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Balance Sheet Summary as of December 31, 2022 and 2021

The following table summarizes the right of use asset and lease liability balances for the Company’s operating and finance leases at December 31, 2021 and 2020:

The following tables summarize the ROU asset and lease liability balances for the Company’s operating and finance leases at December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

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Real estate and other 13 16 14 19

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Lease Expense Summary for the Year Ended December 31, 2022, 2021 and 2020

We recognize lease expense on a straight-line basis over the lease term and short-term lease expense within Direct operating expenses (exclusive of depreciation and amortization).

For the year ended December 31, 2021, 2020, and 2019, we recognized lease expense comprised of the following components:

For the years ended December 31, 2022, 2021, and 2020, we recognized lease expense comprised of the following components:

Year Ended December 31,

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Short-term lease expense $ 11 $ 8 $ 8

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Lease Terms and Discount Rates

The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and liabilities:

The following outlines the remaining lease terms and discount rates used in the measurement of the Company’s ROU assets and lease liabilities at December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

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Maturities of Lease Liabilities

The following summarizes the remaining minimum lease payments through maturity of the Company’s right-of-use assets and liabilities at December 31, 2021:

The following summarizes the remaining minimum lease payments through maturity of the Company’s lease liabilities at December 31, 2022:

(in millions) Operating Leases Finance Leases

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Total lease liability $ 40 $ 48

On July 31, 2020, Coffeyville Resources Nitrogen Fertilizers, LLC (“CRNF”), a subsidiary of CVR Partners, and Messer LLC (“Messer”) entered into an On-Site Product Supply Agreement (the “Messer Agreement”).

On February 21, 2022, CRNF entered into the First Amendment to the On-Site Product Supply Agreement (the “Messer Amendment”, and collectively, the “Amended Messer Agreement”) with Messer.

Under the Amended Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Amended Messer Agreement, and CRNF is obligated to take as available and pay for, oxygen, nitrogen, and compressed dry air from Messer’s facility.

This arrangement for CRNF’s purchase of oxygen, nitrogen, and dry air from Messer does not meet the definition of a lease under FASB Accounting Standards Codification (“ASC”) Topic 842, Leases, (“Topic 842”), as CRNF does not expect to receive substantially all of the output of Messer’s on-site production from its air separation unit over the life of the Amended Messer Agreement.

The Amended Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Fertilizer Facility.

This arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all

On February 21, 2022, Coffeyville Resources Nitrogen Fertilizer, LLC (“CRNF”) entered into the First Amendment to the On-Site Product Supply Agreement with Messer LLC (“Messer”), which amended the July 31, 2020 On-Site Product Supply Agreement (as amended, the “Messer Agreement”).

Under the Messer Agreement, among other obligations, Messer is obligated to supply and make certain capital improvements during the term of the Messer Agreement, and CRNF is obligated to take as available and pay for oxygen from Messer’s facility.

This arrangement for CRNF’s purchase of oxygen from Messer does not meet the definition of a lease under FASB ASC Topic 842, Leases (“Topic 842”), as CRNF does not expect to receive substantially all of the output, which includes oxygen, nitrogen, and compressed air, of Messer’s on-site production from its air separation unit over the life of the Messer Agreement.

The Messer Agreement also obligates Messer to install a new oxygen storage vessel, related equipment and infrastructure (“Oxygen Storage Vessel” or “Vessel”) to be used solely by the Coffeyville Facility.

The arrangement for the use of the Oxygen Storage Vessel meets the definition of a lease under Topic 842, as CRNF will receive all output associated with the Vessel.

Based on terms outlined in the Messer Agreement, the Company expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $ 25 million being capitalized upon lease commencement when the Vessel is placed in service, which is currently expected within the next 12 months.

On July 14, 2022, the Company entered into the Sixth Amendment to the Sugar Land Plaza Office Building Agreement with LCFRE Sugar Land Town Square, LLC (“LCFRE”), which amends the Sugar Land Plaza Office Building Agreement dated 2016 (as amended, the “LCFRE Agreement”).

Under the LCFRE Agreement, LCFRE will provide office space to the Company which will continue to serve as the Company’s corporate office in Sugar Land, Texas and will commence on October 1, 2023.

Based on the terms outlined in the LCFRE Agreement, the Company expects the lease to be classified as an operating lease under Topic 842, with approximately $ 12 million capitalized upon lease commencement.

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output associated with the Vessel.

Based on terms outlined in the Amended Messer Agreement, the Company expects the lease of the Oxygen Storage Vessel to be classified as a financing lease with an amount of approximately $ 25 million being capitalized upon lease commencement when the Vessel is placed in service.

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(5) Other Current Liabilities

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Accrued Renewable Fuel Standards (“RFS”) obligation $ 692 $ 494

Accrued taxes other than income taxes 51 45

Deferred revenue 48 87

Personnel accruals 47 46

Accrued taxes other than income taxes 45 32

Accrued interest 24 25

Share-based compensation 31 15

Accrued interest 24 24

Operating lease liabilities 15 13

Accrued derivatives 2 17

Current portion of long-term debt and finance lease obligations 6 6

Derivatives 4 2

Other accrued expenses and liabilities 24 15

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Total CVR Partners debt

CVR Refining:

CVR Refining, LP (“CVR Refining”):

Finance lease obligations, net of current portion (2)

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5.750 % Senior Notes, due February 2028

Unamortized debt issuance cost ( 5 ) ( 6 )

Unamortized debt issuance costs ( 4 ) ( 5 )

Total CVR Energy debt 996 995

Total long-term debt and finance lease obligations $ 1,585 $ 1,654

Current portion of long-term debt and finance lease obligations (2) (3)

Current portion of finance lease obligations (2)

Total long-term debt and finance lease obligations, including current portion $ 1,591 $ 1,660

(1) The call price of the 9.25 % Senior Secured Notes due June 2023 (the “2023 UAN Notes”) decreased to par on June 15, 2021.

On June 23, 2021, September 23, 2021, and December 22, 2021, CVR Partners redeemed $ 550 million, $ 15 million, and $ 15 million, respectively, of the 2023 UAN Notes, at par, plus accrued and unpaid interest on the redeemed portion.

The remaining balance of $ 65 million was outstanding as of December 31, 2021.

The $ 65 million outstanding balance of the 2023 UAN Notes was paid in full on February 22, 2022 at par, plus accrued and unpaid interest.

(2) Current portion of finance lease obligations was approximately $ 6 million and $ 6 million as of December 31, 2021 and 2020, respectively.

(3) The $ 2 million outstanding balance of the 6.50 % Notes, due April 2021, was paid in full on April 15, 2021.

(1) The $ 65 million outstanding balance of the 9.25 % Senior Secured Notes due 2023 (the “2023 UAN Notes”) was paid in full on February 22, 2022 at par, plus accrued and unpaid interest.

(2) Current portion of finance lease obligations was approximately $ 6 million as of both December 31, 2022 and 2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Credit Agreements

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CVR Refining:

Amended and Restated Asset Based (“Petroleum ABL”) Credit Agreement (3)

$ 400 $ — $ 39 $ 361 November 14, 2022

(1) On September 30, 2021, CVR Partners entered into a senior secured asset based ABL Credit Facility with an aggregate principal amount of up to $ 35 million with a maturity date of September 30, 2024 (the “Nitrogen Fertilizer ABL”) and terminated its $ 35 million ABL Credit Agreement , dated as of September 30, 2016, as amended (the “UAN 2016 ABL Credit Agreement”).

(2) Beginning September 30, 2021, loans under the Nitrogen Fertilizer ABL bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.615 % plus the daily simple Secured Overnight Financing Rate (“SOFR”) or (b) 0.615 % plus a base rate, if our quarterly excess availability is greater than or equal to 75%, (ii) (a) 1.865 % plus SOFR or (b) 0.865 % plus a base rate, if our quarterly excess availability is greater than or equal to 50% but less than 75%, or (iii) (a) 2.115 % plus SOFR or (b) 1.115 % plus a base rate, otherwise.

(3) Loans under the Petroleum ABL bear interest at an annual rate equal to (i) (a) 1.50 % plus LIBOR, to the extent available, or (b) 0.50 % plus a base rate, if our quarterly excess availability is greater than 50%, and (ii) (a) 1.75 % plus LIBOR, to the extent available, or (b) 0.75 % plus a base rate, otherwise.

2028 UAN Notes - On June 23, 2021, CVR Partners and its subsidiary, CVR Nitrogen Finance Corporation (“Finance Co.” and, together with CVR Partners, the “Issuers”), completed a private offering of $ 550 million aggregate principal amount of 6.125 % Senior Secured Notes due 2028 (the “2028 UAN Notes”).

Petroleum ABL (as defined below)

$ 275 $ — $ 23 $ 252 June 30, 2027

2023 UAN Notes - On June 10, 2016, CVR Partners and its subsidiary, CVR Nitrogen Finance Corporation (“Finance Co.” and, together with CVR Partners, the “2023 Notes Issuers”), certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of $ 645 million aggregate principal amount of the 2023 UAN Notes.

The 2023 UAN Notes would have matured on June 15, 2023, but the 2023 Notes Issuers redeemed the remaining outstanding balance at par plus accrued and unpaid interest to the applicable redemption date on February 22, 2022.

Interest on the 2023 UAN Notes was paid semi-annually in arrears on June 15 and December 15 of each year and were guaranteed on a senior secured basis by all of the Nitrogen Fertilizer Partnership’s existing subsidiaries.

The 2023 UAN Notes contained customary covenants for a financing of this type that, among other things, restricted CVR Partners’ ability and the ability of certain of its subsidiaries to have:

(i) sold assets;

(ii) paid distributions on, redeemed or repurchased the Nitrogen Fertilizer Partnership’s units or to have redeemed or repurchased its subordinated debt;

(iii) made investments;

(iv) incurred or guaranteed additional indebtedness or issued preferred units;

(v) created or incurred certain liens;

(vi) entered into agreements that restricted distributions or other payments from CVR Partners’ restricted subsidiaries to CVR Partners;

(vii) consolidated, merged or transferred all or substantially all of CVR Partners’ assets;

(viii) engaged in transactions with affiliates;

and (ix) created unrestricted subsidiaries.

In addition, the indenture contained customary events of default, the occurrence of which would have resulted in or permitted the trustee or the holders of at least 25 % of the 2023 UAN Notes to have caused the acceleration of the 2023 UAN Notes, in addition to pursuing other available remedies.

During 2021, CVR Partners redeemed $ 580 million in aggregate principal amounts of the outstanding 2023 UAN Notes at par.

On February 22, 2022, CVR Partners redeemed all of the remaining outstanding 2023 UAN Notes at par and settled accrued interest of approximately $ 1 million through the date of redemption.

As a result of this transaction, CVR Partners recognized a loss on extinguishment of debt of $ 1 million in the first quarter of 2022, which included the write-off of unamortized deferred financing costs and discount of less than $ 1 million each.

2028 UAN Notes - On June 23, 2021, CVR Partners and Finance Co.

(the “Issuers”), completed a private offering of $ 550 million aggregate principal amount of 6.125 % Senior Secured Notes due 2028 (the “2028 UAN Notes”).

Interest on the 2028 UAN Notes is payable semi-annually in arrears on June 15 and December 15 each year, commencing on December 15, 2021.

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The 2028 UAN Notes are jointly and severally guaranteed on a senior secured basis by all the existing domestic subsidiaries of CVR Partners, excluding Finance Co.

In relation to the issuance of the 2028 UAN Notes, CVR Partners received $ 547 million of net cash proceeds, net of underwriting fees and other third-party fees and expenses associated with the offering.

The debt issuance costs of the 2028 UAN Notes totaled approximately $ 4 million and are being amortized over the term of the 2028 UAN Notes as interest expense using the effective-interest amortization method.

The Issuers may, at their option, at any time and from time to time prior to June 15, 2024, on any one or more occasions, redeem all or part of the 2028 UAN Notes, at a price equal to 100 % of the principal amount plus a “make whole” premium, plus accrued and unpaid interest.

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2026 and thereafter 100.000 %

The indenture governing the 2028 UAN Notes contains covenants that are substantially the same as the indenture governing the 2023 UAN Notes.

However, the 2028 UAN Notes contain a permitted investment activity carveout that allows for the transfer of certain carbon capture assets to a joint venture for the purpose of monetizing potential tax credits.

2023 UAN Notes - On June 10, 2016, CVR Partners and Finance Co.

(together the “2023 Notes Issuers”), certain subsidiary guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral trustee, completed a private offering of $ 645 million aggregate principal amount of 9.25 % Senior Secured Notes due 2023 (the “2023 UAN Notes”).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

2023 UAN Notes mature on June 15, 2023, unless earlier redeemed or repurchased by the issuers.

Interest on the 2023 UAN Notes is payable semi-annually in arrears on June 15 and December 15 of each year.

The 2023 UAN Notes are guaranteed on a senior secured basis by all of the Nitrogen Fertilizer Partnership’s existing subsidiaries.

On or after June 15, 2021, the 2023 Notes Issuers may redeem all or part of the 2023 UAN Notes at a price equal to 100 % of the principal amount plus accrued and unpaid interest to the applicable redemption date.

The 2023 UAN Notes contain customary covenants for a financing of this type that, among other things, restrict CVR Partners’ ability and the ability of certain of its subsidiaries to:

(i) sell assets;

(ii) pay distributions on, redeem or repurchase the Nitrogen Fertilizer Partnership’s units or redeem or repurchase its subordinated debt;

(iii) make investments;

(iv) incur or guarantee additional indebtedness or issue preferred units;

(v) create or incur certain liens;

(vi) enter into agreements that restrict distributions or other payments from CVR Partners’ restricted subsidiaries to CVR Partners;

(vii) consolidate, merge or transfer all or substantially all of CVR Partners’ assets;

(viii) engage in transactions with affiliates;

and (ix) create unrestricted subsidiaries.

In addition, the indenture contains customary events of default, the occurrence of which would result in or permit the trustee or the holders of at least 25 % of the 2023 UAN Notes to cause the acceleration of the 2023 UAN Notes, in addition to the pursuit of other available remedies.

On June 23, 2021, CVR Partners redeemed $ 550 million aggregate principal amount of the outstanding 2023 UAN Notes at par and settled accrued interest of approximately $ 1 million through the date of redemption.

As a result of the redemption, CVR Partners recognized in Interest expense, net an $ 8 million loss on extinguishment of debt in the second quarter of 2021, which includes the write-off of unamortized deferred financing costs and discount of $ 3 million and $ 5 million, respectively.

On September 23, 2021 and December 22, 2021, CVR Partners redeemed $ 15 million and $ 15 million respectively, in aggregate principal amount of the outstanding 2023 UAN Notes at par and settled accrued interest of less than $ 1 million through the date of each redemption.

As a result of these redemptions and for the year ended December 31, 2021, CVR Partners recognized in Interest expense, net a loss on extinguishment of debt of less than $ 1 million in 2021, which includes the write-off of unamortized deferred financing costs and discount.

On February 22, 2022, CVR Partners redeemed all of the outstanding 2023 UAN Notes at par and settled accrued interest of approximately $ 1 million through the date of redemption.

As a result of this transaction, CVR Partners will recognize a loss on extinguishment of debt of $ 1 million in the first quarter of 2022, which includes the write-off of unamortized deferred financing costs and discount of less than $ 1 million each.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The indenture governing the 2028 UAN Notes contains covenants that are substantially the same as the indenture governing the 2023 UAN Notes.

Nitrogen Fertilizer ABL - On September 30, 2021, CVR Partners, LP and its subsidiaries, CVR Nitrogen, LP, East Dubuque Nitrogen Fertilizers, LLC, Coffeyville Resources Nitrogen Fertilizers, LLC, CVR Nitrogen Holdings, LLC, Finance Co.

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The Nitrogen Fertilizer ABL is scheduled to mature on September 30, 2024.

Loans under the Nitrogen Fertilizer ABL initially bear interest at an annual rate equal to, at the option of the borrowers, (i) 1.615 % plus SOFR or (ii) 0.615 % plus a base rate.

Based on the previous quarter’s excess availability, such annual rate could increase to, at the option of the borrowers, (i) 2.115 % plus SOFR or (ii) 1.115 % plus a base rate.

Beginning September 30, 2021, loans under the Nitrogen Fertilizer ABL bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.615 % plus the daily simple Secured Overnight Financing Rate (“SOFR”) or (b) 0.615 % plus a base rate, if our quarterly excess availability is greater than or equal to 75%, (ii) (a) 1.865 % plus SOFR or (b) 0.865 % plus a base rate, if our quarterly excess availability is greater than or equal to 50% but less than 75%, or (iii) (a) 2.115 % plus SOFR or (b) 1.115 % plus a base rate, otherwise.

The borrowers must also pay a commitment fee on the unutilized commitments and also pay customary letter of credit fees.

The Nitrogen Fertilizer ABL contains customary covenants for a financing of this type and requires CVR Partners in certain circumstances to comply with a minimum fixed charge coverage ratio test and contains other restrictive covenants that limit the ability of CVR Partners and its subsidiaries ability to, among other things, incur liens, engage in a consolidation, merger, purchase or sale of assets, pay dividends, incur indebtedness, make advances, investments and loans, enter into affiliate transactions, issue certain equity interests, create subsidiaries and unrestricted subsidiaries, and create certain restrictions on the ability to make distributions, loans, and asset transfers among CVR Partners or its subsidiaries.

Petroleum ABL - On June 30, 2022, CVR Refining and certain of its subsidiaries (the “Credit Parties”) entered into Amendment No.

3 to the Amended and Restated ABL Credit Agreement, dated December 20, 2012 (the “Petroleum ABL Amendment”, and as amended, the “Petroleum ABL”), with a group of lenders and Wells Fargo Bank, National Association, as administrative agent and collateral agent (the “Agent”).

The Petroleum ABL is a senior secured asset based revolving credit facility in an aggregate principal amount of up to $ 275 million with a $ 125 million incremental facility, which is subject to additional lender commitments and certain other conditions.

The proceeds of the loans may be used for capital expenditures, working capital and general corporate purposes of the Credit Parties and their subsidiaries.

The Petroleum ABL provides for loans and letters of credit in an amount up to the aggregate availability under the facility, subject to meeting certain borrowing base conditions, with sub-limits of $ 30 million for swingline loans and $ 60 million (or $ 100 million if increased by the Agent) for letters of credit.

The Petroleum ABL is scheduled to mature on June 30, 2027.

Beginning June 30, 2022, loans under the Petroleum ABL bear interest at an annual rate equal to, at the option of the borrowers, (i) (a) 1.50 % plus the Term SOFR or (b) 0.50 % plus a base rate, if CVR Refining’s quarterly excess availability is greater than 50%, and (ii) (a) 1.75 % plus the Term SOFR or (b) 0.75 % plus a base rate, otherwise.

All borrowings under the Petroleum ABL are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

The Credit Parties must also pay a commitment fee on the unutilized commitments and pay customary letter of credit fees.

The Petroleum ABL contains customary covenants for a financing of this type and requires the Credit Parties in certain circumstances to comply with a minimum fixed charge coverage ratio test, and contains other customary restrictive covenants that limit the Credit Parties’ ability and the ability of their subsidiaries to, among other things, incur liens, engage in a consolidation, merger and purchase or sale of assets, pay dividends, incur indebtedness, make advances, investment and loans, enter into affiliate transactions, issue equity interests, or create subsidiaries and unrestricted subsidiaries.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In connection with the Nitrogen Fertilizer ABL, CVR Partners incurred lender and other third-party costs of $ 1 million, which have been deferred in Prepaid expenses and other current assets and Other long-term assets and are being amortized as interest expense over the term of the Nitrogen Fertilizer ABL using the straight-line amortization method.

Petroleum ABL - On November 14, 2017, CVR Services, CVR Refining, its wholly-owned subsidiary, CVR Refining, LLC (“Refining LLC”) and each of the operating subsidiaries of Refining LLC (collectively, the “Credit Parties”) entered into Amendment No.

1 to the Amended and Restated ABL Credit Agreement (the “Amendment”, and collectively, the “Petroleum ABL”) with a group of lenders and Wells Fargo, as administrative agent and collateral agent.

The Petroleum ABL is a $ 400 million asset-based revolving credit facility, with sub-limits for letters of credit and swingline loans of $ 60 million and $ 40 million, respectively.

The Petroleum ABL also includes a $ 200 million uncommitted incremental facility.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On April 12, 2022 and July 22, 2022, in connection with the Petroleum ABL, numerous additional indirect, wholly-owned subsidiaries (the “Joining Subsidiaries”) of CVR Energy delivered to the Agent Joinder Agreements pursuant to which such Joining Subsidiaries became borrowers for all purposes under the Petroleum ABL and other Credit Documents.

2025 Notes and 2028 Notes - On January 27, 2020, CVR Energy completed a private offering of $ 600 million aggregate principal amount of 5.25 % Senior Unsecured Notes due 2025 (the “2025 Notes”) and $ 400 million aggregate principal amount of 5.75 % Senior Unsecured Notes due 2028 (the “2028 Notes” and, collectively with the 2025 Notes, the “Notes”).

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The Notes are jointly and severally guaranteed on a senior unsecured basis by the wholly-owned subsidiaries of CVR Energy with the exception of CVR Partners and its subsidiaries and certain immaterial wholly-owned subsidiaries of CVR Energy.

In relation to the issuance of the Notes, the Company received $ 993 million of net cash proceeds, net of underwriting fees and other third-party fees and expenses associated with the offering.

The debt issuance costs of the Notes totaled approximately $ 7 million and are being amortized over the terms of the respective notes as interest expense using the effective-interest amortization method.

On or after February 15, 2022 and February 15, 2023, we may on any one or more occasions, redeem all or part of the 2025 Notes and 2028 Notes, respectively, at the redemption prices set forth below expressed as a percentage of the principal amount of the respective notes, plus accrued and unpaid interest to the applicable redemption date.

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In addition, the indenture contains customary events of default, the occurrence of which would result in or permit the trustee or the holders of at least 25 % of the 2025 Notes and 2028 Notes to cause, amongst other available remedies, the acceleration of the respective notes.

Covenant Compliance

The Company is in compliance with all covenants of the Nitrogen Fertilizer ABL, the Petroleum ABL, and the senior notes as of December 31, 2021.

In connection with the Notes, issued pursuant to the Indenture dated January 27, 2020 (the “Indenture”), among CVR Energy, the subsidiary guarantors listed therein (collectively, the “Guarantors”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”), a new wholly-owned subsidiary of CVR Energy, CVR Renewables, LLC (“CVR Renew”), the Guarantors, and the Trustee executed and delivered a Supplemental Indenture pursuant to which CVR Renew unconditionally guaranteed all of the Company’s obligations under the Notes on the terms and conditions set forth in the Note Guarantee and the Indenture.

On April 12, 2022, CVR Energy, the existing subsidiary guarantors of the Notes and CVR Renewables, LLC, a new wholly-owned subsidiary of CVR Energy (“CVR Renew”), on the one hand, and the trustee for the Notes, on the other hand, executed and delivered a Supplemental Indenture pursuant to which CVR Renew unconditionally guaranteed all of the Company’s obligations under the Notes on the terms and conditions set forth in the note guarantee and the indenture governing the Notes.

On July 1, 2022, in connection with the Petroleum ABL Amendment, the Joining Subsidiaries that were not previously parties to the Indenture executed and delivered a Supplemental Indenture to the Trustee pursuant to which such Joining Subsidiaries unconditionally guaranteed all of the Company’s obligations under the Notes on the terms and conditions set forth in the Note Guarantee and the Indenture.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables present the Company’s revenue disaggregated by major product, which include a reconciliation of the disaggregated revenue by product and other revenue components for the Company’s reportable segments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Covenant Compliance

The Company and its subsidiaries, as applicable, have been in compliance with all covenants of the Nitrogen Fertilizer ABL, the Petroleum ABL, and the senior notes as of December 31, 2022.

The following tables present the Company’s revenue disaggregated by major product, which include a reconciliation of the disaggregated revenue by the Company’s reportable segments.

Year Ended December 31, 2022

(in millions) Petroleum Nitrogen Fertilizer Other / Eliminations Consolidated

(in millions) Petroleum Segment (1)

Nitrogen Fertilizer Segment Other / Eliminations Consolidated

Gasoline $ 4,830 $ — $ — $ 4,830

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Year Ended December 31, 2021

(in millions) Petroleum Nitrogen Fertilizer Other / Eliminations Consolidated

(in millions) Petroleum Segment (1)

Nitrogen Fertilizer Segment Other / Eliminations Consolidated

Gasoline $ 3,679 $ — $ — $ 3,679

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2020

(in millions) Petroleum Nitrogen Fertilizer Other / Eliminations Consolidated

(in millions) Petroleum Segment (1)

Nitrogen Fertilizer Segment Other / Eliminations Consolidated

Gasoline $ 1,882 $ — $ — $ 1,882

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Total revenue $ 3,586 $ 350 $ ( 6 ) $ 3,930

(1) Distillates consist primarily of diesel fuel, kerosene, and jet fuel.

(2) Other revenue consists primarily of feedstock and asphalt sales and Cushing, OK storage tank lease revenue.

See Note 2 (“Summary of Significant Accounting Policies”) for further discussion on the Cushing, OK storage tanks.

Petroleum Segment

The Petroleum Segment’s revenue from product sales is recorded upon delivery to customers, which is the point at which title is transferred and the customer has assumed the risk of loss.

This generally takes place as product passes into the pipeline, as a product transfer order occurs within a pipeline system, or as product enters equipment or locations supplied or designated by the customer.

Qualifying excise and other taxes collected from the Petroleum Segment’s customers and remitted to governmental authorities are not included in reported revenues.

Many of the Petroleum Segment’s contracts have index-based pricing which is considered variable consideration that should be estimated in determining the transaction price.

The Petroleum Segment determined that it does not need to estimate the variable consideration because the uncertainty related to the consideration is resolved on the pricing date or the date when the product is delivered.

The Petroleum Segment may incur broker commissions or transportation costs prior to product transfer on some of its sales.

The Petroleum Segment expenses these broker costs, since the contract durations are less than a year.

Transportation costs are accounted for as fulfillment costs and are expensed as incurred since they do not meet the requirement for capitalization.

The Petroleum Segment’s contracts with its customers state the terms of the sale, including the description, quantity, and price of each product sold.

Depending on the product sold, payment from customers is generally due in full within 2 to 30 days of product delivery or invoice date.

The Petroleum Segment generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specification.

The Petroleum Segment has determined that product returns or refunds are very rare and will account for them as they occur.

(1) The Petroleum Segment may incur broker commissions or transportation costs prior to the transfer on certain sales.

The broker costs are expensed since the contract durations are less than one year.

Transportation costs are accounted for as fulfillment costs and are expensed as incurred.

(2) Distillates consist primarily of diesel fuel, kerosene, jet fuel and renewable fuels activity.

(3) Freight revenue recognized by the Petroleum Segment is primarily tariff and line loss charges rebilled to customers to reimburse the Petroleum Segment for expenses incurred from a pipeline operator.

An offsetting expense is included in Cost of materials and other.

Nitrogen Fertilizer Segment

The Nitrogen Fertilizer Segment sells its products on a wholesale basis under a contract or by purchase order.

The Nitrogen Fertilizer Segment’s contracts with customers generally contain fixed pricing and most have terms of less than one year.

The Nitrogen Fertilizer Segment recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer.

The customer acceptance point is stated in the contract and may be

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

at one of the Nitrogen Fertilizer Segment’s manufacturing facilities, at one of the Nitrogen Fertilizer Segment’s off-site loading facilities, or at the customer’s designated facility.

Freight revenue recognized by the Nitrogen Fertilizer Segment represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers.

An offsetting expense for freight is included in Cost of materials and other.

Qualifying excise and other taxes collected from the Nitrogen Fertilizer Segment’s customers and remitted to governmental authorities are not included in reported revenues.

Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within 15 to 30 days of product delivery.

The Nitrogen Fertilizer Segment generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications.

Product returns are rare, and as such, the Nitrogen Fertilizer Segment does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation.

The Nitrogen Fertilizer Segment has an immaterial amount of variable consideration for contracts with an original duration of less than a year.

A small portion of the Nitrogen Fertilizer Segment’s revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing.

The Nitrogen Fertilizer Segment’s contracts do not contain a significant financing component.

The Nitrogen Fertilizer Segment has an immaterial amount of fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received, consistent with prior accounting practice.

(4) Other revenue consists primarily of renewable fuels activity, feedstock, asphalt sales, and pipeline and processing fees.

Remaining Performance Obligations

We have spot and term contracts with customers and the transaction prices are either fixed or based on market indices (variable consideration).

We do not disclose remaining performance obligations for contracts that have terms of one year or less and for contracts where the variable consideration was entirely allocated to an unsatisfied performance obligation.

As of December 31, 2022, these contracts have a remaining duration of less than three years .

As of December 31, 2022, the Nitrogen Fertilizer Segment had approximately $ 5 million of remaining performance obligations for contracts with an original expected duration of more than one year.

The Nitrogen Fertilizer Segment expects to recognize approximately $ 6 million of these performance obligations as revenue by the end of 2022, an additional $ 4 million by 2023, and the remaining balance thereafter.

The Nitrogen Fertilizer Segment expects to recognize approximately $ 4 million of these performance obligations as revenue by the end of 2023 and the remaining balance during 2024.

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

The Nitrogen Fertilizer Segment’s deferred revenue is a contract liability that primarily relates to nitrogen fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer.

An associated receivable is recorded for uncollected prepaid contract amounts.

Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product.

A summary of the Nitrogen Fertilizer Segment’s deferred revenue activity during the year ended December 31, 2022 is presented below:

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Balance at December 31, 2022 $ 48

(1) Includes $ 94 million where the payment associated with prepaid contracts was collected.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(1) Includes $ 83 million where payments associated with prepaid contracts were collected as of December 31, 2022.

Major Customers

Petroleum Segment - The Petroleum Segment had one customer who comprised 16 % of petroleum net sales for the year ended December 31, 2021 and two customers who comprised 26 % and 25 % of petroleum net sales for the years ended December 31, 2020 and 2019, respectively.

Nitrogen Fertilizer Segment - The Nitrogen Fertilizer Segment had one customer who comprised 13 % for the year ended December 31, 2021 and two customers who comprised 26 % and 28 % of nitrogen fertilizer net sales for the years ended December 31, 2020 and 2019, respectively.

Petroleum Segment - The Petroleum Segment had two customers who comprised 25 % and 26 % of petroleum net sales for the years ended December 31, 2022 and 2020, respectively, and one customer who comprised 16 % of petroleum net sales for the year ended December 31, 2021.

Nitrogen Fertilizer Segment - The Nitrogen Fertilizer Segment had two customers who comprised 30 % and 26 % of nitrogen fertilizer net sales for the years ended December 31, 2022 and 2020, respectively, and one customer who comprised 13 % of nitrogen fertilizer net sales for the year ended December 31, 2021.

(8) Derivative Financial Instruments, Investments and Fair Value Measurements

Derivative Financial Instruments

Our segments are subject to price fluctuations caused by supply conditions, weather, economic conditions, interest rate fluctuations, and other factors.

To manage price risk on crude oil and other inventories and to fix margins on certain future production, the Petroleum Segment from time to time enters into various commodity derivative transactions.

On a regular basis, the Company enters into commodity contracts with counterparties for the purchases or sale of crude oil, blendstocks, various finished products, and RINs.

The contracts usually qualify for the normal purchase normal sale exception and follow the accrual method of accounting.

All other derivative instruments are recorded at fair value using mark-to-market accounting on a periodic basis utilizing third-party pricing.

The Petroleum Segment holds derivative instruments, such as exchange-traded crude oil futures and over-the-counter forward swap agreements, which it believes provide an economic hedge on future transactions, but such instruments are not designated as hedges under GAAP.

There are no premiums paid or received at inception of the derivative contracts or upon settlement.

The Petroleum Segment may enter into forward purchase or sale contracts associated with RINs.

As of December 31, 2021, the Petroleum Segment had open fixed-price commitments to purchase a net 2 million RINs.

Commodity derivatives include commodity swaps and forward purchase and sale commitments.

There were no outstanding commodity swap positions as of December 31, 2021 compared to 7 million barrels in outstanding commodity swap positions as of December 31, 2020.

As of December 31, 2021 and 2020, there were approximately 1 million and 4 million barrels in forward purchase commitments, respectively, and 1 million and 2 million barrels in forward sale commitments, respectively.

The following outlines the gains (losses) recognized on the Company’s derivative activities, all of which are recorded in Cost of materials and other on the Consolidated Statements of Operations:

Year Ended December 31,

(in millions) 2021 2020 2019

Forward purchases and sales contracts, net $ 25 $ 53 $ 20

Commodity swap instruments ( 68 ) ( 8 ) —

Futures contracts ( 1 ) 10 ( 1 )

Total (loss) gain on derivatives, net $ ( 44 ) $ 55 $ 19

Offsetting Assets and Liabilities

The Company elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty.

These amounts are recognized as current assets and current liabilities within the Prepaid expenses and other

The following outlines the net notional buy (sell) position of our commodity derivative instruments held as of December 31, 2022 and 2021:

(in thousands of barrels) Commodity 2022 2021

Forwards Crude 373 67

Futures Crude ( 150 ) ( 20 )

Futures ULSD ( 215 ) ( 220 )

Futures Soybean ( 109 ) —

As of December 31, 2022, the Petroleum Segment had open fixed-price commitments to purchase a net amount of 34 million RINs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

current assets and Other current liabilities financial statement line items, respectively, in the Consolidated Balance Sheets as follows:

Derivative Assets Derivative Liabilities

December 31, December 31,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following outlines the realized and unrealized gains (losses) incurred from derivative activities, all of which were recorded in Cost of materials and other on the Consolidated Statements of Operations:

Year Ended December 31,

(in millions) 2022 2021 2020

Commodity derivatives $ 5 $ 1 $ ( 7 ) $ ( 5 )

Counterparty netting ( 5 ) ( 1 ) 5 1

Total net fair value of derivatives $ — $ — $ ( 2 ) $ ( 4 )

Investments consist of equity securities, which are reported at fair value in our Consolidated Balance Sheets.

These investments are considered trading securities.

Investment income on marketable securities consists of the following:

Forwards $ 12 $ 25 $ 53

Swaps ( 48 ) ( 68 ) ( 8 )

Futures ( 19 ) ( 1 ) 10

Total (loss) gain on derivatives, net $ ( 55 ) $ ( 44 ) $ 55

Offsetting Assets and Liabilities

The following outlines the consolidated balance sheet line items that include our derivative financial instruments and the effect of the collateral netting.

Such amounts are presented on a gross basis, before the effects of collateral netting.

The Company elected to offset the derivative assets and liabilities with the same counterparty on a net basis when the legal right of offset exists.

Derivatives Collateral Netting Net Value Derivatives Collateral Netting Net Value

(in millions) Assets Liabilities Assets Liabilities

Prepaid expenses and other current assets

$ — $ ( 1 ) $ 1 $ — $ — $ — $ — $ —

Other current liabilities

— ( 4 ) — ( 4 ) 5 ( 7 ) — ( 2 )

At December 31, 2022 and 2021, the Company had $ 7 million and $ 4 million of collateral under master netting arrangements not offset against the derivatives within Prepaid expenses and other current assets on the Consolidated Balance Sheets, respectively, primarily related to initial margin requirements.

Our derivative instruments may contain credit risk-related contingent provisions associated with our credit ratings.

If our credit rating were to be downgraded, it would allow the counterparty to require us to post collateral or to request immediate, full settlement of derivative instruments in liability positions.

There were no derivative liabilities with credit risk-related contingent provisions as of December 31, 2022 and 2021, and no collateral has been posted.

Investments consisted of equity securities, which are reported at fair value in Prepaid expenses and other current assets on our Consolidated Balance Sheets.

These investments were considered trading securities.

Investment income on marketable securities consisted of the following:

Year Ended December 31,

3 unchanged sentences

Investment income on marketable securities $ — $ 81 $ 41

On June 10, 2021, the Company distributed its investment of 10,539,880 shares of common stock of Delek US Holdings, Inc.

(“Delek”) in the form of a special dividend to its stockholders (the “Stock Distribution”).

Following the Stock Distribution, the Company continued to hold a nominal investment in other marketable securities of Delek as of December 31, 2021.

On January 18, 2022, the Company divested its remaining nominal investment in Delek US Holdings, Inc.

As of December 31, 2022, the Company did not hold any investment in Delek.

See further discussion of the distribution in Note 14 (“Related Party Transactions”).

Fair Value Measurements

In accordance with FASB ASC Topic 820 — Fair Value Measurements and Disclosures (“Topic 820”), the Company utilizes the market approach to measure fair value for its financial assets and liabilities.

Topic 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels.

The following is a brief description of those three levels:

• Level 1 — Quoted prices in active markets for identical assets or liabilities

• Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities)

• Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining the fair value)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

The following tables set forth the assets and liabilities measured or disclosed at fair value on a recurring basis, by input level, as of December 31, 2022 and 2021:

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Location and description

Other current assets (commodity derivatives) $ — $ 1 $ — $ 1

Total Assets $ — $ 1 $ — $ 1

Other current liabilities (commodity derivatives) $ — $ ( 4 ) $ — $ ( 4 )

Other current liabilities (RFS obligation) — ( 494 ) — ( 494 )

Other current liabilities (RFS obligations) — ( 692 ) — ( 692 )

Long-term debt and finance lease obligations, net of current portion (long-term debt) — ( 1,394 ) — ( 1,394 )

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Location and description

Prepaid expenses and other current assets (investments) $ 173 $ — $ — $ 173

Prepaid expenses and other current assets (derivative financial instruments) $ — $ 1 $ — $ 1

Total assets $ — $ 1 $ — $ 1

Note payable and finance lease obligations (current portion of long-term debt) $ — $ ( 2 ) $ — $ ( 2 )

Other current liabilities (commodity derivatives) — ( 17 ) — ( 17 )

Other current liabilities (RFS obligation) — ( 214 ) — ( 214 )

Other current liabilities (derivative financial instruments) $ — $ ( 2 ) $ — $ ( 2 )

Other current liabilities (RFS obligations) — ( 494 ) — ( 494 )

Long-term debt and finance lease obligations, net of current portion (long-term debt) — ( 1,620 ) — ( 1,620 )

Total liabilities $ — $ ( 2,116 ) $ — $ ( 2,116 )

As of December 31, 2021 and 2020, the only financial assets and liabilities that are measured at fair value on a recurring basis are the Company’s investments, derivative instruments, long-term debt, and the RFS obligation.

The estimated fair value of cash equivalents, included amounts invested in short-term money market funds, and restricted cash approximate their carrying amounts.

The Petroleum Segment’s commodity derivative contracts and RFS obligation, which use fair value measurements and are valued using broker quoted market prices of similar instruments, are considered Level 2 inputs.

The Company had no transfers of assets or liabilities between any of the above levels during the year ended December 31, 2021.

The Company had no transfers of assets or liabilities between any of the above levels during the years ended December 31, 2022 and 2021.

(9) Share-Based Compensation

CVR Energy, CVR Refining, and CVR Partners all have Long-Term Incentive Plans (collectively, the “LTIPs”) that permit the granting of options, stock and unit appreciation rights, restricted shares, restricted stock units, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock).

Individuals who are eligible to receive awards and grants under or in connection with the LTIPs include the employees, officers, and directors of the Company, CVR Refining, and CVR Partners.

The Company had 6.8 million shares or units, as applicable, available for future grants under our plans at December 31, 2021.

CVR Energy and CVR Partners have Long-Term Incentive Plans (collectively, the “LTIPs”) that permit the granting of options, stock and unit appreciation rights, restricted shares, restricted stock units, phantom units, unit awards, substitute awards, other unit-based awards, cash awards, dividend and distribution equivalent rights, share awards, and performance awards (including performance share units, performance units, and performance-based restricted stock).

Individuals who are eligible to receive awards and grants under or in connection with the LTIPs include the employees, officers, and directors of the Company and CVR Partners.

The Company had 6.8 million shares available for future grants under the CVR Energy LTIP at December 31, 2022.

Incentive and Phantom Unit Awards

Incentive and phantom unit awards have been granted to officers, employees, and directors (collectively, the “Share-Based Awards”).

As a result, Share-Based Awards that reflect the value and dividends or distributions of CVR Energy or CVR Partners, as applicable, have been granted and remain outstanding as of December 31, 2021.

Each Share-Based Award and the related dividend or distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the

Incentive and phantom unit awards that have been granted to officers, employees, and directors (collectively, the “Share-Based Awards”) reflect the value and dividends or distributions of CVR Energy or CVR Partners, as applicable.

Each Share-Based Award and the related dividend or distribution equivalent right represents the right to receive, upon vesting, a cash payment equal to (i) the average fair market value of one share or unit, as applicable, in accordance with the award agreement, plus (ii) the per share or unit cash value of all dividends or distributions declared and paid, as applicable, from the grant date through the vesting date.

The Share-Based Awards are generally graded-vesting awards, which vest over three years with one-third of the award vesting each year the grantee remains employed by the Company or its subsidiaries.

Compensation expense is recognized ratably, based on service provided to the Company and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being remeasured to fair value at the end of each reporting period due to their liability-award classification.

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average fair market value of one share or unit, as applicable, in accordance with the award agreement, plus (ii) the per share or unit cash value of all dividends or distributions declared and paid, as applicable, from the grant date through the vesting date.

The Share-Based Awards are generally graded-vesting awards, which vest over three years with one-third of the award vesting each year the grantee remains employed by the Company or its subsidiaries.

Compensation expense is recognized ratably, based on service provided to the Company and its subsidiaries, with the amount recognized fluctuating as a result of the Share-Based Awards being re-measured to fair value at the end of each reporting period due to their liability-award classification.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of activity for the Company’s Share-Based Awards for the year ended December 31, 2022 is presented below:

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Performance Unit Awards

Pursuant to an employment agreement with the Company’s current chief executive officer, the Company entered into two performance award agreements on November 1, 2017.

In connection with the performance period of January 1, 2018 to December 31, 2018, a performance award was granted with a target value of $ 1.5 million (the “2018 CEO Performance Award”).

The payout of $ 1.9 million, paid in February 2019, under the 2018 CEO Performance Award was based on the Company’s performance against certain safety, operating, and financial measures.

Additionally, the Company entered into a performance award agreement (the “CEO Performance Award”).

The CEO Performance Award represents the right to receive upon vesting, a cash payment equal to $ 10 million if the average closing price of the Company’s common stock over the 30 -trading day period from January 4, 2022 to February 15, 2022 is equal to or greater than $ 60 per share.

Effective as of December 22, 2021, the Company entered into an amendment to the CEO Performance Award, which extended the end of the performance period thereunder to December 31, 2024, and changed the 30 day trading period on which the average closing price of the Company’s common stock is based to January 6, 2025 through February 20, 2025.

Pursuant to the amended employment agreement, effective December 22, 2021, with the Company’s current chief executive officer, the Company amended the performance award agreement (the “CEO Performance Award”) to extend the end of the performance period thereunder to December 31, 2024.

The CEO Performance Award represents the right to receive upon vesting, a cash payment equal to $ 10 million if the average closing price of the Company’s common stock over the 30 -day trading period from January 6, 2025 through February 20, 2025 is equal to or greater than $ 60 per share.

Compensation Expense

A summary of total share based compensation expense and unrecognized compensation expense related to the Share-Based Awards and the Company’s performance awards, the amounts allocated to each of the Company’s segments, and the amounts that were not allocated to segments during the years ended December 31, 2021, 2020, and 2019 is presented below:

A summary of total share-based compensation expense and unrecognized compensation expense related to the Share-Based Awards and the Company’s performance awards during the years ended December 31, 2022, 2021, and 2020 is presented below:

Expenses Unrecognized Expense

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Incentive Units $ 45 $ 22 $ 3 $ 33 2.0

Phantom Units 27 1 5 19 2.0

Performance awards:

CVR Partners - Phantom Units 26 27 1 11 1.4

Performance Unit Awards:

CEO Performance Award (1)

— ( 3 ) — 10 2.0

Total expense $ 46 $ 4 $ 17 $ 56

Total share-based compensation expense $ 71 $ 46 $ 4 $ 54

(1) All expenses, recognized and unrecognized, related to the CEO Performance Award are contingent upon whether the performance parameters are probable of being met.

If the performance parameters are not met, no expense will be recognized.

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The total tax benefit recognized during the years ended December 31, 2022, 2021, and 2020 related to compensation expense was $ 19 million, $ 12 million, and $ 1 million, respectively.

2 unchanged sentences

Other Benefit Plans

The Company sponsors and administers two defined-contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (the “Plans”), in which the Company’s employees may participate.

The Company sponsors and administers two defined-contribution 401(k) plans, the CVR Energy 401(k) Plan and the CVR Energy 401(k) Plan for Represented Employees (collectively, the “Plans”), in which the Company’s employees may participate.

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Participants in the Plans may elect to contribute a designated percentage of their eligible compensation in accordance with the Plans, subject to statutory limits.

The Company provides a matching contribution of 100 % of the first 6 % of eligible compensation contributed by participants.

Participants in both Plans are immediately vested in their individual contributions.

Participants in the Plans are immediately vested in their individual contributions.

The Plans provide for a three-year vesting schedule for the Company’s matching contributions and contain a provision to count service with predecessor organizations.

The Company did no t have contributions under the Plans for the year ended December 31, 2021, as the Company matching contributions for the Plans were suspended effective January 1, 2021, and had approximately $ 10 million and $ 9 million for the years ended December 31, 2020 and 2019, respectively.

The Company matching contributions for the Plans resumed effective January 1, 2022.

The Company had approximately $ 11 million and $ 10 million in contributions under the Plans for the years ended December 31, 2022 and 2020, respectively.

The Company had no contributions for the year ended December 31, 2021, as the Company’s matching contributions for the Plans were suspended effective January 1, 2021 and resumed effective January 1, 2022.

(10) Income Taxes

Tax Allocation Agreement

In August 2018, CVR Energy completed an exchange offer whereby public unitholders tendered a total of 21,625,106 CVR Refining common units in exchange for a total of 13,699,549 shares of CVR Energy common stock (the “CVRR Unit Exchange”).

Prior to the CVRR Unit Exchange, CVR Energy was a member of the consolidated federal tax group of AEP, an affiliate of IEP, and party to a tax allocation agreement with AEP (the “Tax Allocation Agreement”).

The Tax Allocation Agreement provided that AEP would pay all consolidated federal income taxes on behalf of the consolidated tax group.

As a result, CVR Energy was required to make payments to AEP in an amount equal to the tax liability, if any, that it would have had paid if it were to file as a consolidated group separate and apart from AEP.

Following the CVRR Unit Exchange, IEP and affiliates’ ownership of CVR Energy was reduced below 80 % and, since that time, CVR Energy is no longer eligible to file as a member of the AEP consolidated federal income tax group.

On August 2, 2018, CVR Energy became the parent of a new consolidated group for U.S.

federal income tax purposes, filing and paying its federal income tax obligations directly to the IRS.

Pursuant to the terms of the Tax Allocation Agreement, however, CVR Energy may be required to make payments in respect of taxes owed by AEP for periods prior to the exchange.

Similar principles may apply for state or local income tax purposes where CVR Energy filed combined, consolidated or unitary tax returns with AEP.

AEP’s federal income tax return for the periods ended December 31, 2017 and 2018 are currently under examination by the IRS.

As of December 31, 2021 and 2020, the Company recognized a no minal payable for state income taxes due to AEP.

The payable is recognized in Other current liabilities in the Consolidated Balance Sheets.

As of December 31, 2022 and 2021, the Company’s Consolidated Balance Sheets reflected a receivable of $ 22 million and $ 26 million, respectively, from the IRS and certain state jurisdictions.

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Income Tax (Benefit) Expense

Income tax (benefit) expense is comprised of the following:

Income Tax Expense (Benefit)

Income tax expense (benefit) is comprised of the following:

Year Ended December 31,

6 unchanged sentences

Total deferred ( 13 ) ( 99 ) ( 27 )

Total income tax (benefit) expense

Total income tax expense (benefit)

$ 157 $ ( 8 ) $ ( 95 )

The following is a reconciliation of total income tax (benefit) expense to income tax (benefit) expense computed by applying the statutory federal income tax rate to pretax income (loss):

The following is a reconciliation of total income tax expense (benefit) to income tax expense (benefit) computed by applying the statutory federal income tax rate to pretax income (loss):

Year Ended December 31,

7 unchanged sentences

Other, net 5 1 1

Total income tax (benefit) expense

Total income tax expense (benefit)

$ 157 $ ( 8 ) $ ( 95 )

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Deferred Tax Assets and Liabilities

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Deferred income tax liabilities:

Unrealized gain — ( 9 )

Investment in CVR Partners ( 68 ) ( 70 )

3 unchanged sentences

Net deferred income tax liabilities $ ( 249 ) $ ( 268 )

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Although realization is not assured, management believes that it is more likely than not that all of the deferred income tax assets will be realized, and therefore, no valuation allowance was recognized as of December 31, 2022 and 2021.

As of December 31, 2022, CVR Energy has state tax credits of approximately $ 9 million, which are available to reduce future state income taxes.

These credits, if not used, will begin expiring in 2036.

These credits have an indefinite carryover period.

Uncertain Tax Positions

4 unchanged sentences

Decrease based on prior year tax position — — ( 2 )

Increase in current year tax positions — — 2

Reductions related to expirations from statute of limitations ( 6 ) — ( 3 )

1 unchanged sentence

Included in the balance of unrecognized tax benefits as of December 31, 2022, 2021, and 2020 are $ 9 million, $ 13 million, and $ 13 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate.

Additionally, the Company reasonably believes that $ 5 million unrecognized tax positions related to state income tax credits will be recognized by the end of 2022 as a result of the expiration of statute of limitations.

Additionally, the Company reasonably believes that $ 10 million of unrecognized tax positions related to state income tax credits will be recognized by the end of 2023 as a result of the expiration of statute of limitations.

Approximately $ 2 million and $ 7 million of unrecognized tax benefits were netted with Deferred income tax asset carryforwards as of December 31, 2022 and 2021, respectively.

The remaining unrecognized tax benefits are included in Other long-term liabilities in the Consolidated Balance Sheets.

CVR Energy recognized $ 1 million interest expense and $ 2 million liability for interest as of December 31, 2021, no minal interest expense and $ 1 million liability for interest as of December 31, 2020, and a no minal interest benefit and a no minal liability for interest as of December 31, 2019.

CVR Energy recognized $ 1 million interest expense and $ 3 million liability for interest as of December 31, 2022, $ 1 million interest expense and $ 2 million liability for interest as of December 31, 2021, and a no minal interest expense and $ 1 million liability for interest as of December 31, 2020.

No penalties were recognized during 2022, 2021, or 2020.

At December 31, 2021, the Company’s tax filings are generally open to examination in the United States for the tax years ended December 31, 2018 through December 31, 2020 and in various individual states for the tax years ended December 31, 2017 through December 31, 2020.

At December 31, 2022, the Company’s tax filings are open to examination in the United States for the tax years ended December 31, 2018 through December 31, 2021 and in various individual states for the tax years ended December 31, 2018 through December 31, 2021.

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(11) Commitments and Contingencies

Supply Commitments

The Company is a party to various supply agreements with both related and third parties which commit the Company to purchase minimum volumes of crude oil, hydrogen, oxygen, nitrogen, pet coke, and natural gas to run its facilities’ operations.

The minimum required payments for unconditional purchase obligations are as follows:

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Thereafter 187

Supply Commitments - The Company is a party to various supply agreements with both related and third parties which commit the Company to purchase minimum volumes of crude oil, hydrogen, oxygen, nitrogen, pet coke, and natural gas to run

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its facilities’ operations.

For the years ended December 31, 2022, 2021, and 2020, amounts purchased under these supply agreements totaled approximately $ 200 million, $ 176 million, and $ 153 million, respectively.

Crude Oil Supply Agreement

Effective on August 4, 2021, an indirect, wholly-owned subsidiary of CVR Refining entered into the Second Amended and Restated Crude Oil Supply Agreement (the “2021 Supply Agreement”) with Vitol Inc.

(“Vitol”) which superseded, in its entirety, the August 31, 2012 Amended and Restated Crude Oil Supply Agreement (the “2012 Supply Agreement” and collectively with the 2021 Supply Agreement, the “Crude Oil Supply Agreement”) between the parties.

The 2021 Supply Agreement is on substantially similar terms as the 2012 Supply Agreement, other than revisions to certain inventory turnover and insurance provisions.

Effective on August 4, 2021, an indirect, wholly-owned subsidiary of CVR Refining entered into the Second Amended and Restated Crude Oil Supply Agreement (the “Crude Oil Supply Agreement”) with Vitol Inc.

(“Vitol”), which superseded, in its entirety, the August 31, 2012 Amended and Restated Crude Oil Supply Agreement between the parties.

Under the Crude Oil Supply Agreement, Vitol supplies the Petroleum Segment with crude oil and intermediation logistics helping to reduce the amount of inventory held at certain locations and mitigate crude oil pricing risk.

Volumes contracted under the Crude Oil Supply Agreement, as a percentage of the total crude oil purchases (in barrels), was approximately 42 %, 33 %, and 36 % for the years ended December 31, 2021, 2020, and 2019, respectively.

The Crude Oil Supply Agreement, which currently extends through December 31, 2022, automatically renews for successive one-year terms (each such term, a “Renewal Term”) unless either party provides the other with notice of nonrenewal at least 180 days prior to expiration of any Renewal Term.

Volumes contracted under the Crude Oil Supply Agreement, as a percentage of the total crude oil purchases (in barrels), were approximately 34 %, 42 %, and 33 % for the years ended December 31, 2022, 2021, and 2020, respectively.

The Crude Oil Supply Agreement, which currently extends through December 31, 2023, automatically renews for successive one-year terms (each such term, a “Renewal Term”) unless either party provides the other with notice of non-renewal at least 180 days prior to expiration of the term or any Renewal Term.

Contingencies

Attorney’s office for the Southern District of New York contacted CVR Energy in September 2017 seeking production of information pertaining to CVR Refining’s, CVR Energy’s and Mr.

Icahn’s activities relating to the RFS and Mr.

Icahn’s former role as an advisor to former President Trump.

CVR Energy cooperated with the request and provided information in response to the subpoena.

Attorney’s office has not made any claims or allegations against CVR Energy or Mr.

CVR Energy believes it maintains a strong compliance program and, while no assurances can be made, CVR Energy does not believe this inquiry will have a material impact on its business, financial condition, results of operations or cash flows.

Call Option Lawsuits - In 2019, the Company, CVR Refining and its general partner, CVR Refining Holdings, IEP, and certain directors and affiliates (collectively, the “Call Defendants”) were named in at least one of nine now consolidated lawsuits filed in the Delaware Court of Chancery by purported former unitholders of CVR Refining, on behalf of themselves and an alleged class of similarly situated unitholders relating to the Company’s exercise of the call option (“Call Option”) under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refining’s general partner (collectively, the “Call Option Lawsuits”).

The Call Option Lawsuits primarily allege breach of contract, tortious interference and breach of the implied covenant of good faith and fair dealing and seek monetary damages and attorneys’ fees, among other remedies.

In January 2020, the court dismissed CVR Holdings and certain former directors of CVR Refining’s general partner from the Call Option Lawsuits, though permitted some or all of the claims to proceed against each remaining defendant.

Trial of the Call Option Lawsuits concluded in July 2021, and the parties are currently in post-trial proceedings.

The Company believes the Call Option Lawsuits are without merit and is vigorously defending against them.

The plaintiffs filed their Opening Post-Trial Brief on December 22, 2021, now quantifying alleged damages in excess of $ 300 million;

the Call Defendants strongly dispute the plaintiffs’ claims and are preparing responsive briefings.

Accordingly, the Company cannot determine at this time the outcome of the Call Option Lawsuits, including whether such outcome would have a material impact on the Company’s financial position, results of operations, or cash flows.

However, while we firmly believe this matter is without merit, if it is concluded in a manner adverse to the Company, it could have a material effect on the Company’s financial position, results of operations, or cash flows.

The Call Defendants are also parties to two lawsuits relating to insurance coverage for the Call Option Lawsuits, one filed on January 27, 2021, in the 434th Judicial District Court of Fort Bend County, Texas by the Call Defendants’ primary and excess insurers (the “Insurers”) seeking a declaratory judgment determining that they owe no indemnity coverage for the Call Option Lawsuits in relation to insurance policies that have coverage limits of $ 50 million, and another filed on January 30, 2022 in the Superior Court of the State of Delaware by the Call Defendants against the Insurers for anticipatory breach of contract and breach of the implied covenant of good faith and fair dealing (the “Delaware Coverage Case”).

On November 23, 2021, the court in the Delaware Coverage Case granted partial summary judgment in favor of the Call Defendants relating to the amount of the deductible.

As both lawsuits are in their early stages, the Company cannot determine at this time the outcome of these lawsuits, including whether the outcome would have a material impact on the Company’s financial position, results of operations, or cash flows.

Call Option Lawsuits - In December 2022, the Delaware Court of Chancery approved the final settlement of the consolidated lawsuits (collectively, the “Call Option Lawsuits”) filed by purported former unitholders of CVR Refining on behalf of themselves and an alleged class of similarly situated unitholders against the Company and certain of its affiliates (the “Call Defendants”) relating to the Company’s exercise of the call option under the CVR Refining Amended and Restated Agreement of Limited Partnership assigned to it by CVR Refining’s general partner including the Stipulation, Compromise and Release (the “Settlement”) entered into by the parties on August 19, 2022.

The Settlement had no further impact on the Company’s financial position or results of operations beyond the $ 79 million recognized within Other (expense) income, net in the Consolidated Statements of Operations for the year ended December 31, 2022 to reflect the estimated probable loss.

On November 28, 2022, the 434 th Judicial District Court of Fort Bend County, Texas granted summary judgment in favor of the primary and excess insurers (the “Insurers”) of the Call Defendants in the Insurers’ declaratory judgment action seeking determination that the Insurers owe no indemnity coverage for the Call Option Lawsuits in relation to insurance policies that have coverage limits of $ 50 million.

The Company intends to appeal the grant of summary judgment while it concurrently pursues its claims against the Insurers it filed in October 2022 in the Superior Court of the State of Delaware (the “Superior Court”) alleging breach of contract and breach of the implied covenant of good faith and fair dealing against their primary and excess insurers relating to their denial of coverage of the Call Defendants’ defense expenses and indemnity, as well as other

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Renewable Fuel Standards - The Company’s Petroleum Segment is subject to the RFS, implemented by the Environmental Protection Agency (the “EPA”), which requires refiners to either blend renewable fuels into their transportation fuels or purchase renewable fuel credits, known as RINs, in lieu of blending.

The Petroleum Segment is not able to blend the substantial majority of its transportation fuels and must either purchase RINs on the open market or obtain waiver credits for cellulosic biofuels, or other exemptions from the EPA, in order to comply with the RFS.

For the years ended December 31, 2021, 2020, and 2019, the Company recognized an expense of approximately $ 435 million, $ 190 million, and $ 43 million, respectively, for the Petroleum Segment’s compliance with the RFS (based on the 2020 renewable volume obligation (“RVO”) and proposed preliminary 2021 RVO range, for the respective periods, excluding the impacts of any exemptions or waivers to which the Petroleum Segment may be entitled).

The recognized amounts are included within Cost of materials and other in the Consolidated Statements of Operations and represent costs to comply with the RFS obligation through purchasing of RINs not otherwise reduced by blending of ethanol or biodiesel.

At each reporting period, to the extent RINs purchased and generated through blending are less than the RFS obligation (excluding the impact of exemptions or waivers to which the Petroleum Segment may be entitled), the remaining position is marked-to-market using RIN market prices at period end.

As of December 31, 2021 and 2020, the Petroleum Segment’s RFS position was approximately $ 494 million and $ 214 million, respectively, which is recorded in Other current liabilities in the Consolidated Balance Sheets.

RFS Disputes - On June 25, 2021, the Supreme Court of the United States (the “Supreme Court”) overturned a decision of the 10 th Circuit Court of Appeals (“10 th Circuit”) vacating three small refinery exemptions (“SREs”) under the RFS, including one issued to the Wynnewood Refinery for 2017, to the extent such SREs were vacated based on failure to have continuously received an SRE in all applicable preceding years.

Following the Supreme Court ruling, the Environmental Protection Agency (the “EPA”) notified WRC that it would reconsider WRC’s 2017 SRE on other grounds referenced in the 10th Circuit decision.

On July 20, 2021, after remand from the Supreme Court, the 10th Circuit vacated its prior judgment, recalled its previous mandate denying WRC’s 2017 SRE, entered a new judgment and issued a new mandate transferring jurisdiction back to the EPA.

On August 26, 2021, the EPA filed a Motion for Clarification asking the 10th Circuit whether the alternative holdings that supported the 10th Circuit’s prior judgment remain in effect and whether the new mandate returns the agency actions back to the EPA, which Motion for Clarification was denied.

On September 15, 2021, WRC advised the EPA it considered its 2017 SRE intact and demanded that the EPA return the status of WRC’s 2017 SRE to “granted.” The EPA has not yet responded to WRC’s demand.

Given the EPA’s failure to respond, we cannot currently estimate the outcome, impact or timing of resolution of this matter.

WRC and CRRM are also involved in or expected to be involved in several lawsuits relating to the RFS, including a lawsuit filed in 2019 in the D.C.

Circuit by four ethanol and biofuels trade associations against the EPA claiming the EPA exceeded its authority in granting SREs for the 2018 compliance year, including the 2018 SRE granted to WRC’s Wynnewood Refinery (the “2018 SRE Lawsuit”), which 2018 SRE petitions were remanded by the court back to the EPA on December 8, 2021, with instructions to act on such petitions by April 7, 2022;

a lawsuit by WRC against the EPA relating to damages sustained by WRC as a result of the EPA’s failure to timely issue WRC’s 2018 SRE (the “WRC 2018 SRE Lawsuit”);

and a Petition for Review of the EPA’s February 2, 2022, final rule changing compliance deadlines under the RFS filed by WRC and CRRM with the D.C.

Circuit on February 4, 2022 (the “Deadline Lawsuit”).

The Company anticipates additional litigation to be filed in the future relating to the RFS, including one or more lawsuits by WRC against the EPA should it finalize the position set forth in its Proposed RFS Small Refinery Exemption Decision dated December 7, 2021 (the “Proposed Denial”), in which the EPA announced its intention to change its statutory interpretation of the CAA and deny 65 pending SRE petitions, including those submitted by WRC for 2019, 2020, and 2021, through which the Proposed Denial by the EPA has informed WRC it intends to also apply to deny all 2018 SREs previously approved by the EPA, including for WRC’s Wynnewood Refinery.

These matters are in their early stages, and the Company cannot determine at this time the outcomes of these matters, including whether such outcomes would have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

conduct of the Insurers relating to the Call Option Lawsuits.

On January 3, 2023, the Superior Court granted the Call Defendants’ motion for leave to amend its complaint to seek recovery from the Insurers of all of the amounts paid in settlement of the Call Option Lawsuits.

As our potential appeal of the Texas court decision and our Superior Court lawsuit are in their early stages, the Company cannot determine at this time the outcome of these lawsuits, including whether the outcome would have a material impact on the Company’s financial position, results of operations, or cash flows.

Renewable Fuel Standards - The Petroleum Segment’s subsidiaries that are subject to the RFS (collectively, the “obligated-party subsidiaries”) implemented by the Environmental Protection Agency (the “EPA”), which requires refiners to either blend renewable fuels into their transportation fuels or purchase renewable fuel credits, known as RINs, in lieu of blending.

The Petroleum Segment’s obligated-party subsidiaries are not able to blend the majority of its transportation fuels and must either purchase RINs or obtain waiver credits for cellulosic biofuels, or other exemptions from the EPA, in order to comply with the RFS.

Additionally, the Petroleum Segment’s obligated-party subsidiaries purchase RINs generated from our renewable diesel operations, whose operating results are not included in either of our reportable segments, to partially satisfy their RFS obligations.

For the years ended December 31, 2022, 2021, and 2020, the Company’s obligated-party subsidiaries recognized expense of approximately $ 435 million, $ 435 million, and $ 190 million, respectively, for their compliance with the RFS (based on the 2020, 2021, and 2022 renewable volume obligation (“RVO”), for the respective periods, excluding the impacts of any exemptions or waivers to which the Company may be entitled).

At each reporting period, to the extent RINs purchased and generated through blending are less than the RFS obligation (excluding the impact of exemptions or waivers to which the Company may be entitled), the remaining position is valued using RIN market prices at period end.

As of December 31, 2022 and 2021, the Company’s obligated-party subsidiaries’ RFS positions were approximately $ 692 million and $ 494 million, respectively, and are recorded in Other current liabilities on the Consolidated Balance Sheets.

RFS Disputes - The Company has filed a number of petitions in the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit”) and the United States Court of Appeals for the District of Columbia Circuit (the “DC Circuit”) challenging the EPA’s denial of small refinery exemptions sought by Wynnewood Refining Company, LLC (“WRC”) for the 2017 through 2021 compliance periods (the “SRE Denial Lawsuits”), the EPA’s April 2022 and June 2022 alternative compliance rulings and the EPA’s Final Rule issued in July 2022 establishing RVO, and also intervened in an action filed by certain biofuels producers relating to the RFS.

In late 2022, the Fifth Circuit denied the EPA’s motions to stay the SRE Denial Lawsuits, which motion remains pending.

In February 2023, WRC filed a motion in the Fifth Circuit seeking a stay of enforcement of the RFS against WRC pending resolution of the SRE Denial Lawsuits.

As each of these proceedings is in its preliminary stages, the Company cannot determine at this time the outcomes of these matters.

While we intend to prosecute these actions vigorously, if these matters are ultimately concluded in a manner adverse to the Company, they could have a material effect on the Company’s financial position, results of operations, or cash flows.

Environmental, Health, and Safety (“EHS”) Matters

Clean Air Act Matter - On August 21, 2018, CRRM received a letter from the United States Department of Justice (“DOJ”) on behalf of the EPA and KDHE alleging violations of the CAA and a 2012 Consent Decree (the “CD”) between Coffeyville Resources Refining & Marketing, LLC (“CRRM”), the United States (on behalf of the EPA) and the Kansas Department of Health and Environment (“KDHE”) at CRRM’s Coffeyville refinery, primarily relating to flares.

In June 2020, a tolling agreement between the parties relating to such allegations expired, and the DOJ and KDHE sent demand letters relating to the

Clean Air Act Matter - In June and October 2020, the United States (on behalf of the EPA) and the state of Kansas, acting by and through the Kansas Department of Health and Environment (“KDHE”), demanded stipulated penalties from CRRM for alleged violations of a Consent Decree (“CD”) the parties entered into in 2012.

On April 5, 2021, CRRM filed a petition for judicial review of the stipulated penalty demand with the United States District Court for the District of Kansas (“D.

On March 30, 2022, the D.

issued a memorandum and order denying CRRM’s petition for judicial review and awarding the United States and KDHE approximately $ 6.8 million in stipulated penalties (the “Stipulated Claims”).

On May 12, 2022, CRRM appealed the D.

Kan.’s order to the United States Court of Appeals for the Tenth Circuit, where it remains pending.

Pursuant to the CD, CRRM has deposited the amount of the stipulated penalty demand into a commercial escrow account pending resolution of the disputed claim, and such funds are legally restricted for use and are included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

In December 2020, the United States and KDHE filed a supplemental complaint in the D.

Kan., related to alleged violations of the CAA, CRRM’s Title V permit, the Kansas state implementation plan (“SIP”), and Kansas law.

The United States and KDHE subsequently amended that complaint in February 2022, adding claims for alleged violations of the CAA, CRRM’s Title V permit, the Kansas SIP, and Kansas law.

The United States and KDHE are seeking civil penalties and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

allegations (the “Stipulated Claims”) and seeking stipulated penalties under the CD.

In February 2021, the DOJ and KDHE sent CRRM a statement of position under the CD regarding its demand for Stipulated Claims.

As CRRM disputes most claims asserted by the government, in accordance with the CD, CRRM deposited funds into a commercial escrow account pending resolution of disputed claims.

The escrowed funds are legally restricted for use and are included within Prepaid expenses and other current assets on the consolidated balance sheets.

In April 2021, CRRM filed a petition for judicial review of the Stipulated Claims with the United States District Court for the District of Kansas (“D.

Kan.”), in accordance with the dispute resolution provisions of the CD.

On September 23, 2021, the court ordered briefing on CRRM’s petition, which was completed in December 2021.

Separately, in December 2020, the DOJ and KDHE filed a supplement complaint in the D.

Kan asserting nine counts for alleged violations of the CAA, the Kansas State Implementation Plan and Kansas law seeking civil penalties, injunctive and related relief, which they sought leave to amend on February 10, 2022, to add an additional eight counts under Part 63 of the National Emission Standards for Hazardous Air Pollutants from Petroleum Refineries Subparts CC and R (“NESHAP”), Kansas law, and CRRM’s permits relating to flares, heaters, and related matters (collectively, the “Statutory Claims”).

In March 2021, CRRM filed a partial motion to dismiss certain Statutory Claims, which is still pending with the D.

Negotiations relating to the Stipulated Claims and the Statutory Claims are ongoing and the Company cannot determine at this time the outcome of these matters, including whether such outcome, or any subsequent enforcement or litigation relating thereto would have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

injunctive relief.

In March 2022, CRRM filed a partial motion to dismiss certain claims in the amended supplemental complaint.

On October 3, 2022, the D.

issued a memorandum and order granting CRRM’s motion to dismiss KDHE’s request for penalties under Kansas law but denying the remainder of CRRM’s motion to dismiss.

subsequently held a scheduling conference in December 2022 and entered a scheduling order in January 2023.

Under that schedule, the case will proceed through discovery in 2023 and 2024.

The court will schedule a trial in the case at a later date.

In January 2023, the United States (on behalf of the EPA) and the State of Kansas, through KDHE, amended their complaint before the D.

in connection with their allegations that CRRM violated the CAA, the Kansas State Implementation Plan, Kansas law, 40 C.F.R.

Part 63 and CRRM’s permits relating to flares, heaters, and related matters and seeking civil penalties, injunctive and related relief (collectively, the “Statutory Claims”), adding certain claims including relating to an alleged failure to comply with certain emissions reporting requirements for 2016.

Negotiations and proceedings remain ongoing relating to the Statutory Claims, and also relating to the Stipulated Claims being sought by the United States (on behalf of the EPA) and the State of Kansas (through KDHE) in connection with their allegations that CRRM violated the CAA and a 2012 Consent Decree between CRRM, the United States (on behalf of the EPA) and KDHE, following CRRM’s appeal to the United States Court of Appeals for the Tenth Circuit of the denial by D.Kan.

of CRRM’s petition for judicial review of the Stipulated Claims.

As negotiations and proceedings relating to the Stipulated Claims and the Statutory Claims are ongoing, the Company cannot determine at this time the outcome of these matters, including whether such outcome, or any subsequent enforcement or litigation relating thereto would have a material impact on the Company’s financial position, results of operations, or cash flows.

Environmental Remediation - As of December 31, 2022 and 2021, environmental accruals representing estimated costs for future remediation efforts at certain Petroleum Segment sites totaled approximately $ 22 million and $ 12 million, respectively.

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(12) Business Segments

The Company has two operating segments:

CVR Energy’s revenues are primarily derived from two reportable segments:

Petroleum and Nitrogen Fertilizer.

These operating segments are also the Company’s reportable segments.

As discussed in Note 1 (“Organization and Nature of Business”), the Petroleum Segment is comprised entirely of the consolidated operations of CVR Refining and its subsidiaries, while the Nitrogen Fertilizer Segment is comprised entirely of the consolidated operations of CVR Partners and its subsidiaries.

The other amounts reflect intercompany eliminations, corporate cash and cash equivalents, income tax activities, and other corporate activities that are not allocated to the operating segments.

All operations of the segments are located within the United States.

The Company evaluates the performance of its segments based primarily on segment operating income (loss) and Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”).

For the purposes of the business segments disclosure, the Company presents operating income (loss) as it is the most comparable measure to the amounts presented on the Consolidated Statements of Operations.

The other amounts reflect renewable fuels activities, intercompany eliminations, corporate cash and cash equivalents, income tax activities, and other corporate activities that are not allocated or aggregated to the reportable segments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following tables summarize operating results, capital expenditures, and total asset information by segment:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes operating results and capital expenditures information by segment:

Year Ended December 31,

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Nitrogen Fertilizer 836 533 350

Other ( 12 ) ( 6 ) ( 8 )

Other, including intersegment eliminations (1)

141 ( 12 ) ( 6 )

Total net sales $ 10,896 $ 7,242 $ 3,930

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Nitrogen Fertilizer 320 134 ( 35 )

Other ( 20 ) ( 17 ) ( 21 )

Other, including intersegment eliminations (1)

( 76 ) ( 20 ) ( 17 )

Total operating income (loss)

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Interest expense, net ( 85 ) ( 117 ) ( 130 )

Investment income from marketable securities 81 41 —

Other income, net 15 7 13

Investment income on marketable securities — 81 41

Other (expense) income, net ( 77 ) 15 7

Income (loss) before income tax expense $ 801 $ 66 $ ( 415 )

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Other, including intersegment eliminations (1)

( 1,335 ) ( 589 )

Total assets $ 4,119 $ 3,906

(1) Other includes amounts for the Wynnewood renewable diesel unit project.

(2) Capital expenditures are shown exclusive of capitalized turnaround expenditures and business combinations.

(2) Other includes expenses related to and amounts incurred for the Wynnewood renewable diesel unit project.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(13) Supplemental Cash Flow Information

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Non-cash investing and financing activities:

Change in construction in progress included in accounts payable (1)

2 ( 3 ) ( 7 )

Change in capital expenditures included in accounts payable (1)

Change in turnaround expenditures included in accounts payable ( 2 ) 3 ( 4 )

Change in deferred financing costs included in accounts payable — 1 —

Non-cash dividends to CVR Energy stockholders — 251 —

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures.

Cash, cash equivalents and restricted cash consisted of the following:

As of December 31,

(in millions) 2022 2021

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Cash, cash equivalents and restricted cash $ 517 $ 517

(1) Capital expenditures are shown exclusive of capitalized turnaround expenditures.

(2) The restricted cash balance is included within Prepaid expenses and other current assets on the Consolidated Balance Sheets.

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Activity associated with the Company’s related party arrangements for the years ended December 31, 2022, 2021, and 2020 is summarized below:

Expenses with related parties

Expenses from Related Parties

Year Ended December 31,

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Enable Joint Venture Transportation Agreement $ 10 $ 11 $ 11

Payments (received) made:

Midway Joint Venture Agreement (1)

Dividends (2)

AEP Tax Allocation Agreement — — ( 3 )

(1) See below for a summary of the dividends paid to IEP for the years ended December 31, 2021, 2020, and 2019 .

Enable Joint Venture Agreement

CVR Refining is party to a transportation agreement as part of the Enable JV for an initial term of 20 years under which Enable provides transportation services for crude oil purchased within a defined geographic area.

Additionally, CVR Refining

(1) Represents reimbursements for crude oil transportation services incurred on the Midway JV through Vitol as the intermediary purchasing agent.

(2) See below for a summary of the dividends paid to IEP during the years ended December 31, 2022, 2021, and 2020.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

entered into a terminalling services agreement with Enable JV under which it receives access to Enable JV’s terminal in Lawrence, Oklahoma to unload and pump crude oil into Enable JV’s pipeline for an initial term of 20 years.

Midway Joint Venture

For the years ended December 31, 2021, 2020, and 2019, CRRM incurred costs, which are included in Cost of materials and other, of $ 20 million, $ 17 million, and $ 21 million, respectively, from crude oil transportation services incurred on the Midway JV through Vitol as the intermediary purchasing agent.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Enable Joint Venture Transportation and Terminalling Services Agreements

We are party to a transportation agreement, effective September 19, 2016, as part of the Enable JV for an initial term of 20 years under which Enable provides transportation services for crude oil purchased within a defined geographic area.

Additionally, we entered into a terminalling services agreement, effective September 19, 2016, with Enable JV under which it receives access to Enable JV’s terminal in Lawrence, Oklahoma to unload and pump crude oil into Enable JV’s pipeline for an initial term of 20 years.

Corporate Master Service Agreement

On April 12, 2022, in connection with our Corporate Master Service Agreement effective January 1, 2020, by and among our wholly-owned subsidiary, CVR Services, and certain other of our subsidiaries, including but not limited to CVR Partners and its subsidiaries, pursuant to which CVR Services provides the service recipients thereunder with management and other professional services (the “Corporate MSA”), the Joining Subsidiaries were joined as service recipients under the Corporate MSA.

Dividends to CVR Energy Stockholders

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IEP, through its ownership of the Company’s common stock, is entitled to receive dividends that are declared and paid by the Company based on the number of shares held at each record date.

No dividends were declared related to the fourth quarter of 2021, and there were no quarterly dividends declared or paid during 2021 related to the first, second, and third quarters of 2021 and fourth quarter of 2020.

During the years ended December 31, 2020 and 2019, the Company paid dividends totaling $ 1.20 and $ 3.05 per common share, or $ 121 million and $ 306 million, respectively.

Of these dividends, IEP received $ 85 million and $ 218 million, respectively, for the same periods.

On May 26, 2021, the Company announced a special dividend of approximately $ 492 million, or equivalent to $ 4.89 per share of the Company’s common stock, to be paid in a combination of cash (the “Cash Distribution”) and the Stock Distribution.

The following table presents quarterly dividends, excluding any special dividends, paid to the Company’s stockholders, including IEP, during 2022 (amounts presented in table below may not add to totals presented due to rounding).

Quarterly Dividends Paid (in millions)

Related Period Date Paid Quarterly Dividends Per Share Public Stockholders IEP Total

2022 - 1st Quarter

May 23, 2022 $ 0.40 $ 12 $ 28 $ 40

2022 - 2nd Quarter

August 22, 2022 0.40 12 28 40

2022 - 3rd Quarter

November 21, 2022 0.40 12 28 40

Total 2022 quarterly dividends

$ 1.20 $ 35 $ 85 $ 121

No quarterly dividends were paid during the first quarter of 2022 related to the fourth quarter of 2021, and there were no quarterly dividends declared or paid during 2021 related to the first, second, and third quarters of 2021 and fourth quarter of 2020.

During the year ended December 31, 2020, the Company paid quarterly dividends totaling $ 1.20 per common share, or $ 121 million.

Of these dividends, IEP received $ 85 million due to its ownership interest in the Company’s shares.

On August 1, 2022 and October 31, 2022, the Company also declared special dividends of $ 2.60 and $ 1.00 per share, or $ 261 million and $ 101 million, respectively, which were paid on August 22, 2022 and November 21, 2022, respectively.

Of these amounts, IEP received $ 185 million and $ 71 million, respectively, due to its ownership interest in the Company’s shares.

On June 10, 2021, the Company distributed an aggregate amount of approximately $ 241 million, or $ 2.40 per share of the Company’s common stock, pursuant to the Cash Distribution, and approximately 10,539,880 shares of Delek common stock, which represented approximately 14.3 % of the outstanding shares of Delek common stock, pursuant to the Stock Distribution.

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The Stock Distribution was recorded as a reduction to equity through a derecognition of our investment in Delek, and the Company recognized a gain of $ 112 million from the initial investment in Delek through the date of the Stock Distribution.

For the fourth quarter of 2022, the Company, upon approval by the Board on February 21, 2023, declared a cash dividend of $ 0.50 per share, or $ 50 million, which is payable March 13, 2023 to shareholders of record as of March 6, 2023.

Of this amount, IEP will receive $ 36 million due to its ownership interest in the Company’s shares.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Distributions to CVR Partners ’ Unitholders

Distributions, if any, including the payment, amount and timing thereof, are subject to change at the discretion of the UAN GP Board.

The following table presents distributions paid by CVR Partners to CVR Partners’ unitholders, including amounts received by the Company, as of December 31, 2021.

Distributions Paid (in millions)

Related Period Date Paid Distribution Per

The following tables present quarterly distributions paid by CVR Partners to its unitholders, including amounts received by the Company, during December 31, 2022 and 2021 (amounts presented in tables below may not add to totals presented due to rounding):

Quarterly Distributions Paid (in millions)

Related Period Date Paid Quarterly Distributions Per

Common Unit Public Unitholders CVR Energy Total

2021 - 2nd Quarter August 23, 2021 $ 1.72 $ 11 $ 7 $ 18

2021 - 3rd Quarter November 22, 2021 2.93 20 11 31

Total dividends $ 4.65 $ 31 $ 18 $ 49

There were no distributions declared or paid by CVR Partners related to the first quarter of 2021 and fourth quarter of 2020, and no distributions were declared or paid during 2020.

During the year ended December 31, 2019, CVR Partners paid distributions totaling $ 4.00 per common unit on a split-adjusted basis, or $ 45 million.

Of these distributions, CVR Energy received $ 16 million.

2021 - 4th Quarter

March 14, 2022 $ 5.24 $ 35 $ 20 $ 56

2022 - 1st Quarter

May 23, 2022 2.26 15 9 24

2022 - 2nd Quarter

August 22, 2022 10.05 67 39 106

2022 - 3rd Quarter

November 21, 2022 1.77 12 7 19

Total 2022 quarterly distributions

$ 19.32 $ 129 $ 75 $ 205

Quarterly Distributions Paid (in millions)

Related Period Date Paid Quarterly Distributions Per

Common Unit Public Unitholders CVR Energy Total

2021 - 2nd Quarter

August 23, 2021 $ 1.72 $ 11 $ 7 $ 18

2021 - 3rd Quarter

November 22, 2021 2.93 20 11 31

Total 2021 quarterly distributions

$ 4.65 $ 31 $ 18 $ 50

There were no quarterly distributions declared or paid by CVR Partners related to the first quarter of 2021 and fourth quarter of 2020.

During the year ended December 31, 2020, there were no quarterly distributions declared or paid by CVR Partners.

For the fourth quarter of 2022, CVR Partners, upon approval by the UAN GP Board on February 21, 2023, declared a distribution of $ 10.50 per common unit, or $ 111 million, which is payable March 13, 2023 to unitholders of record as of March 6, 2023.

Of this amount, CVR Energy will receive approximately $ 41 million, with the remaining amount payable to public unitholders.

(15) Subsequent Events

We believe that certain carbon oxide capture and sequestration activities conducted at or in connection with the Coffeyville Fertilizer Facility qualify under the Internal Revenue Service safe harbor described in Revenue Procedure 2020-12 for certain tax credits available to joint ventures under Section 45Q of the Internal Revenue Code of 1986, as amended (“Section 45Q Credits”).

In January 2023, we entered into a series of agreements with CapturePoint LLC, an unaffiliated Texas limited liability company, and certain unaffiliated third-party investors intended to qualify under the Internal Revenue Service safe harbor described in Revenue Procedure 2020-12 for certain joint ventures that are eligible to claim Section 45Q Credits and to allow us to monetize Section 45Q Credits we expect to generate from January 6, 2023 until March 31, 2030.

In January 2023, we received an initial upfront payment, net of expenses, of approximately $ 18 million and could receive up to an additional $ 60 million in payments through March 31, 2030, if certain carbon oxide capture and sequestration milestones are met, subject to the terms of the applicable agreements.

The foregoing summaries of the applicable agreements do not purport to be complete and are qualified in their entirety by the terms of the relevant agreements, which will be filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2023.

Effective February 1, 2023, in connection with our growing focus on decarbonization, we completed a transformation and restructuring of our business to segregate our renewables business.

The restructuring took place in several phases, and included the formation of new, wholly-owned subsidiaries (“NewCos”) of CVR Energy, and transferred certain assets to these NewCos

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AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

to, among other purposes, better align our organizational structure with management, financial reporting, and our goal to maximize our renewables focus.

The Company evaluated all other subsequent events, if any, that would require an adjustment to the Company’s consolidated financial statements or require disclosure in the notes to the consolidated financial statements through the date of issuance of the consolidated financial statements.

Where applicable, the notes to these consolidated financial statements have been updated to discuss all significant subsequent events which have occurred.

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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data